Home / News / India /  Govt plans record borrowing in FY24 to bridge revenue gap

The government plans to borrow a record 15.4 lakh crore from dated securities in FY24 to meet its expenditure requirement to prop up the economy. This is higher than the total borrowing of 14.21 lakh crore for the current financial year ending March 31, 2023. 

During the Budget presentation, Finance Minister Nirmala Sitharaman said the net market borrowings from dated securities are estimated at 11.8 lakh crore to finance the fiscal deficit in 2023-24. "The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at 15.4 lakh crore," she said. 

The government has raised 12.93 lakh crore till January 27, which is 91% of the overall borrowing target of 14.21 lakh crore estimated for 2022-23. Though, the finance minister retained the fiscal deficit target at 6.4% despite an increase in the subsidy bill.

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Meanwhile, the Modi government unveiled one of its biggest jumps in capital spending in the past decade in its budget for the coming year to boost economic growth, while aiming to lower fiscal deficit before elections due next year. The aim is to have strong public finances and a robust financial sector for the benefit of all sections of society, FM Sitharman said in her Union Budget 2023 speech on Wednesday.

“After a subdued period of the pandemic, private investments are growing again.. The budget makes the need once again to ramp up the virtuous cycle of investment and job creation. Capital investment is being increased steeply for the third year in a row by 33%," she said.

The finance ministry's annual Economic Survey, released on Tuesday, forecast the economy could grow 6% to 6.8% next fiscal year, down from 7% projected for the current year, while warning about the impact of cooling global demand on exports. Sitharaman said that despite a global slowdown because of the COVID-19 pandemic and the Russia-Ukraine war, the Indian economy was "on the right track".

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