Centre borrows 55% more so far this fiscal

Indicating a massive revenue crunch due to the second wave of the pandemic that has forced many states to declare full lockdowns for almost two months now, the Centre has borrowed Rs 2.1 lakh crore so far this fiscal -- a whopping 55% more than what it was a year ago.

But thanks to the deft yield management by the central bank, the only saving grace has been the low cost of the money raised so as despite the steeply higher drawdowns, the average cost of the money for the government has been under check and at the Friday's auction, it is paying only 6.08%, much lower than last year and the same as last week, chief economist of Care Ratings Madan Sabnavis said on Friday.

The market borrowing of Rs 2.1 lakh crore is 17.5% of the budgeted debt creation of Rs 12.05 lakh crore for the full year and 30% of the first half borrowings calendar of Rs 7.24 lakh crore, he said.

He further said total borrowings by the Centre so far this fiscal is a whopping 55% more than the same period last year and attributed it to the lockdowns in most states and the resultant impact on revenue collections.

At the latest borrowing on Friday, the government borrowed only Rs 26,550 crore of the Rs 32,000 crore notified. Of the total bids worth Rs 19,114 crore were accepted by the RBI while bids for Rs 7,437 crore were devolved to the primary dealers. The total borrowing for the week is Rs 550 crore more than the notified amount but is 30% lower than the previous week.