The Union government is considering keeping its gross market borrowings for the fiscal year 2024-25 (FY25) at a level similar to the current fiscal year (FY24), according to two government sources. The move is aimed at controlling increased borrowings, largely driven by pandemic-related expenditures. In the upcoming Interim Budget scheduled for presentation on February 1, Finance Minister Nirmala Sitharaman might propose the government's gross market borrowing for FY25 to be in the range of Rs 15 lakh crore ($180.47 billion) to Rs 15.5 lakh crore, as per the report.
For the ongoing fiscal year, the government has set a gross market borrowing target of Rs 15.43 lakh crore. As of January 22, approximately Rs 14.08 lakh crore, equivalent to about 91% of the FY24 gross market borrowing target, had been raised by the government. Prior to the onset of the Covid-19 pandemic, the government's gross market borrowing for the fiscal year 2019-20 was Rs 7.1 lakh crore. There is a genuine intent within the government to decrease its market borrowings in the current fiscal year. Despite facing political pressure, Finance Minister Sitharaman might consider further reducing the fiscal deficit to 5.3% of India's gross domestic product (GDP) in the upcoming budget.
"BofA Securities, in a statement, anticipated that the fiscal deficit of the central government would further narrow down to 5.3% of the GDP, despite potential electoral pressures. A comprehensive Budget for the fiscal year 2024-25 is expected to be unveiled in July by the newly elected government following the general elections in April-May. Finance Minister Sitharaman, earlier this month, dismissed the possibility of any 'spectacular announcement' in her sixth budget. She clarified that the budget scheduled for February 1, 2024, would essentially be a vote on account due to the impending elections, serving the purpose of meeting government expenses until a new government assumes office".