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New Delhi: The government will borrow Rs 7.24 lakh crore in the first half of 2021-22 fiscal to meet resources to perk up the economy hit by coronavirus pandemic.

According to the Budget for 2021-22, the government’s gross borrowing was estimated at Rs 12.05 lakh crore in the financial year beginning April 1.

“In the Budget, we had announced that there would be a gross borrowing of Rs 12.05 lakh crore and net borrowing of Rs 9.37 lakh crore. In the first half of 2021-22, we would be borrowing Rs 7.24 lakh crore, which is 60.06% of the gross issuances,” Economic Affairs Secretary Tarun Bajaj said.

Gross borrowing includes repayments of past loans. Repayment for past loans in the next financial year has been pegged at Rs 2.80 lakh crore.

“The gross borrowing from the market for the next year would be around Rs 12 lakh crores. We plan to continue with our path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-26 with a fairly steady decline over the period,” Finance Minister Nirmala Sitharaman had said while presenting Budget 2021-22 last month.

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

The Budget has pegged fiscal deficit at 6.8% for the next fiscal, down from 9.5% of the GDP in the current financial year.

“The fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP. We have funded this through Government borrowings, multilateral borrowings, Small Saving Funds and short-term borrowings,” she had said. Bajaj said the fiscal deficit for the current fiscal would be around the Revised Estimate announced in the Budget.

He also said that the government has mandated the RBI to maintain the retail inflation target at 4% plus-minus 2% till March 31, 2026.