The government sets the net indebtedness of the market at Rs 5.36 lakh crore for fiscal year 21

NEW DELHI: The government will borrow Rs 5.36 lakh crore from the market in 2020-21, marginally higher than the estimated Rs 4.99 lakh crore for the current financial year ending March 2020.

According to the revised Estimate, the network for the current year rose to Rs 4.99 lakh crore compared to the Budget estimate of Rs 4.48 lakh crore.

The loan would be Rs 7.8 lakh crore for the next financial year compared to Rs 7.1 lakh crore estimated for the current financial year.

Gross indebtedness includes repayments of past loans.

Live plus Repayment of past loans in the next financial year has been set at Rs 2.35 lakh crore.

In presenting the Budget for 2020-21, the Minister of Finance said: The net loans of the market for the year 2019-20 would be Rs 4.99 lakh crore and for the year 2020-21, they would be Rs 5.36 lakh crore.

"A good part of the borrowings for the financial year 2020-21 would go towards capital expenditure of the government that has been scaled up by plus than 21 per cent.

As I mentioned earlier, another 22 billion rupees have been allocated to capital to finance certain specific financial companies, which would take advantage of it on multiple occasions and provide much-needed long-term financing for the infrastructure sector. That should stimulate growth impulses in the economy , she said.

The government raises funds from the market to finance its fiscal deficit through overdue securities and treasury bills.

The government has set the fiscal deficit at 3.5 percent since next financial year, below 3.8 percent of GDP for the current fiscal year.

The government had previously estimated that the fiscal deficit was 3.3 percent of GDP for the current fiscal, but due to the shortage of income, it had to increase it and use the 'escape clause' in the Fiscal Responsibility and Management Law of the Budget (FRBM).

The 'escape clause' allows the government to breach its fiscal deficit target by 0.5 percentage points at times of severe stress in the economy , including periods of structural change and those when growth falls sharply.