India’s gross borrowing program for the current financial year sees an unusual high increase in borrowing targets.The estimated FY21 gross borrowing target has increased to Rs 12 lakh crore from Rs 7.8 lakh crore. The increase of more than 50 percent has been attributed to the coronavirus outbreak that’s stalled the economy.
The borrowing has been increased as the government needs money to spend on public expenditure, such as health, education, infrastructure expansion. The COVID-19 pandemic has impacted all budget calculations. The lockdown has caused a huge economic loss, with both manufacturing and services PMIs hitting rock bottom in April.
According to experts, the higher borrowing will be possible with a combination of lower tax collections, and the fiscal stimulus needed to support the economy.The increase in borrowings has been necessitated on account of the COVID-19 pandemic and has been done in consultation with the Reserve Bank of India.
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