Govt to borrow ₹3.5 lakh crore in FY18

NEW DELHI: The government will borrow Rs 3.5 lakh crore from the market in 2017-18, around Rs 75,000 crore lower than the the current fiscal.

"I have taken due care to limit the net market borrowing of the government to Rs 3.48 lakh crore after buyback, much lower than Rs 4.25 lakh crore of the previous year," Finance Minister Arun Jaitley said in the Budget 2017-18 speech on Wednesday.

However, gross borrowing has been pegged at Rs 5.8 lakh crore up for 2017-18, marginally higher from Budget estimate of Rs 6 lakh crore in the ongoing fiscal.

Gross borrowing includes repayments of past loans and interests. Repayment for past loans for the next fiscal has been pegged at 1.5 lakh crore.

Under the Market Stabilisation Scheme (MSS), the government will float bonds worth Rs 1 lakh crore in the next fiscal as against Rs 1.01 lakh crore in the current fiscal.

MSS does not add to the fiscal burden but it is used to manage liquidity in the market. Against the Budget estimate of Rs 20,000 crore under MSS for the current fiscal, the government had to raise the limit to Rs 1.01 lakh crore in order to mop up additional liquidity infused in the market due to demonetisation.

Adhering to fiscal consolidation roadmap, Finance Minister Arun Jaitley on Wednesday+ said the government will target to bring down the fiscal deficit to 3.2 per cent of the GDP in the fiscal 2017-18.

"I have pegged the fiscal deficit at 3.2 per cent in 201718 and remain committed to achieve 3 per cent in the following year. With this gradual approach, I have ensured adherence to fiscal consolidation without compromising requirements of public expenditure," he said in his Budget speech for 2017-18.

Revenue deficit will be reduced to 2.1 per cent for 2017-18 from 2.3 per cent in the ongoing fiscal, he said.

Net market borrowing would be Rs 3.48 lakh crore in 2017-18 from 4.1 per cent in the current fiscal, he said.