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The union government is likely to stick to the borrowing target for the current financial year and there is no plan for additional borrowing yet, news agency PTI reported, citing a government source.

The government lost 1 lakh crore in revenue after it cut excise duty cut on petrol and diesel to temper inflation. This revenue dent was seen to be filled by additional borrowings.

The government had announced borrow a record 14.31 trillion for the current fiscal year, seeking to revitalize the economy after the pandemic. It will borrow 8.45 trillion in the first half of the current fiscal, or nearly 60% of its planned borrowing for the full year.

The central government reduced the excise duty on petrol and diesel by 8 per litre and 6 per litre, respectively, to control surging retail inflation. This has led to prices of these fuels falling across the country.

All other things remaining the same, economists expect this to help bring down retail inflation by 20-40 basis points (bps). One basis point is one-hundredth of a percentage point.

The duty cut is also expected to put pressure on the country's fiscal deficit which is pegged at 6.4% of GDP for FY23.

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