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The finance ministry said on Monday that the government will borrow Rs 5.03 lakh crore in the second half of the current fiscal to fund the revenue gap for reviving the pandemic-hit economy. It had said in a statement that the government raised Rs 7.02 lakh crore by issuing bonds, during the first half. Out of the gross market borrowing of Rs 12.05 lakh crore projected for FY 2021-22 in the union budget, 60% which amounts to Rs 7.24 lakh crore was planned to be borrowed in the first half. In the second half of FY 2021-22, the government is planning to borrow the balance of Rs 5.03 lakh crore.

GST compensation

It added that the second half projection also requires the release of balance amount to states on account of back-to-back loan facility in-lieu of GST compensation during the year.

The government’s gross borrowing was estimated at Rs 12.05 lakh crore, while Rs 9.37 lakh crore was pegged as the net borrowing in the financial year starting April 1, according to the budget 2021-22.

Gross borrowings includes repayments of past loans. For the next financial year, repayment for past loans has been pegged at Rs 2.80 lakh crore.

In order to fund its fiscal deficit through treasury bills and dated securities, the government raises money from the market.

For the next fiscal the budget has projected the fiscal deficit at 6.8%, down from 9.5% of the GDP during the current financial year.