Government may keep 2024-25 gross borrowings at Rs 15-15.5 lakh crore: Report

Government is reportedly considering maintaining its gross market borrowings at a level similar to the current fiscal year, sources within the government told news agency Reuters. The move aims to curb the substantial increase in borrowings, primarily attributed to pandemic-related expenditures.

According to informed sources, Finance Minister Nirmala Sitharaman is expected to propose a gross market borrowing ranging between Rs 15 lakh crore and Rs 15.5 lakh crore in the budget presentation on February 1. This projection closely aligns with the target of Rs 15.43 lakh crore set for the ongoing fiscal year ending on March 31. As of Jan. 22, the government has already secured about 91% of this year's target, amounting to approximately 14.08 trillion rupees.

This contemplated borrowing level is approximately double the pre-pandemic figure of Rs 7.1 lakh crore recorded in 2019-20. One official stressed on government's commitment to reducing market borrowings in the current fiscal year.

Despite the upcoming election, where Prime Minister Narendra Modi seeks a rare third consecutive term, the government is anticipated to trim its fiscal deficit by at least 50 basis points. This adjustment is expected through limitations on spending for welfare programs and subsidies, as indicated by a Reuters poll aligning with economists' estimates of gross borrowing at Rs 15.6 lakh crore.

Economists participating in the poll also project a reduction in the fiscal deficit to 5.3 per cent of the gross domestic output in 2024/25, down from 5.9 per cent in the current year. The finance ministry has not yet responded to requests for comments on these developments.

(With Reuters inputs)