Sitharaman: Centre, states can front-load borrowing

NEW DELHI: The central government is open to front-loading its borrowing for the current fiscal and states have been allowed to do the same to meet their spending needs, finance minister Nirmala Sitharaman said.

In an interview clip released by the finance ministry on Friday, Sitharaman told journalists from The Indian Express and the Financial Times that the Narendra Modi administration was currently focusing on containing the pandemic while reforms remain unaffected by the devastating second wave.

Sitharaman assured that although the focus is on vaccination and treatment, she was constantly monitoring how the economy is impacted by the surge in Covid-19 infections.

“At this stage, our focus is to address the immediate requirement for saving lives and also making sure that vaccination is ramped up,” Sitharaman said.

The minister said the economy is kept open and, hopefully, local lockdowns will be over once the chain of infection is broken.

She said the government stepped up borrowing substantially in FY21 and that she has made it clear that the government will not hesitate to frontload as much as is required in the current fiscal year.

This option, the minister said, is also being extended to state governments. It will support the spending plans, including investments into infrastructure. The central government’s gross borrowing for FY22 is estimated at ₹12 lakh crore.