Mint Explainer: What are the government's borrowing plans for FY24?
- To finance its fiscal deficit in FY 2023-24, the central government is planning to raise net debt of ₹17.99 trillion from various sources
Every fiscal year, the government borrows from a variety of sources in order to close the fiscal deficit gap in the union budget. Government borrowing serves as a critical component in managing its finances, ensuring that the spending requirements are met. Mint takes a look at the government's borrowing plans.
How much debt will the government raise to finance its fiscal deficit in FY24?
To finance its fiscal deficit in FY 2023-24, the central government is planning to raise net debt of ₹17.99 trillion from various sources. This figure represents about 40% of the total net size of the Union Budget for that year, which amounts to ₹45.03 trillion.
What are the different sources for such borrowings for the current fiscal?
During FY 24, the government plans to raise ₹11.81 trillion from market loans (dated securities), ₹ 0.50 trillion from T-Bills (Treasury Bills), ₹0.22 trillion from external loans, ₹4.71 trillion from securities issued against small savings, ₹ 0.20 trillion from state provident fund, ₹0.54 trillion from other receipts that include internal debt and public account.
How much debt has the government raised till 31 July 2023?
While responding to a question in the Rajya Sabha, finance minister Nirmala Sitharaman recently said the government has mobilised gross and net amount of ₹ 5.77 trillion and ₹ 4.18 trillion, respectively, by issuing dated securities in the current financial year up to 31 July, 2023.
What is the significance of the latest fiscal deficit data?
The government's budget deficit increased from 21.2% to ₹4.51 trillion, or 25.3% of annual estimates, in the first quarter of FY24. This was primarily brought on by a substantial rise in capital spending and an acceleration of the tax devolution to state governments, which partially offset the rise in non-tax revenue. However, there are also encouraging signals, like strong capex, reduced revenue spending, and brisk tax revenues. According to government estimates, the fiscal deficit in FY 2023-24 is pegged at ₹ 17.87 trillion.
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