Union Budget 2024: Centre reduces gross borrowing target to Rs 14.01 lakh crore

Union Budget 2024: In a move to finance a fiscal deficit of 4.9 per cent of GDP, Finance Minister Nirmala Sitharaman announced on July 23 that the Centre has marginally reduced its gross borrowing target from the markets for 2024-25 to Rs 14.01 lakh crore. 

The new target represents a reduction of Rs 1.4 lakh crore compared to the previous estimate of Rs 15.43 lakh crore for the financial year 2023-24.

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year. The Government is committed to staying the course. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as a percentage of GDP,” said Sitharmaan. 

Before the pandemic, the government's market borrowing was Rs 7.1 lakh crore in the financial year 2019-20. However, with the onset of COVID-19, rising expenditures, and dwindling revenues, government gross market borrowing surged by 77 per cent to Rs 12.6 lakh crore by the fiscal year 2020-21. By the fiscal year 2022-23, market borrowing had increased further to Rs 14.21 lakh crore.

This was Nirmala Sitharaman’s seventh consecutive budget speech in a row as finance minister in PM Modi’s cabinet. FM’s speech lasted for 1 hour and 22 minutes. 

(Source: Republicbiz)