The government borrowing in the first half of the current fiscal is expected to be higher than Rs 2,41,000 crore (Rs 2,410 billion) projected in the interim Budget, economic think-tank Centre for Monitoring Indian Economy has said.
"(The) central government borrowing through dated securities was pegged at Rs 2,41,000 crore for the first half of 2009-10. The actual borrowing is likely to turn out to be higher than this figure," the CMIE said here in its monthly review for June.
Higher borrowing meant widening of fiscal deficit, which is already high this year because of the stimulus packages announced by the government to prop up growth in the face of global recession.
Higher expenditure than planned but lower revenue receipts than expected in the interim Budget were the reasons cited by the CMIE for increased government's borrowings.
"In April 2009 itself, (the) Central government expenditure rose by 43 per cent to Rs 66,217 crore (Rs 662.17 billion), while tax receipts were down by 17 per cent to Rs 19,869 crore (Rs 198.69 billion). Lower than expected tax receipts may prompt the government to borrow more from the market," the CMIE said.
Excise collections in April also were down by 52.6 per cent, or Rs 4,670 crore (Rs 46.7 billion), which according to the economic think-tank, could be because of the excise reliefs given in the stimulus packages of the Central government.
Additional borrowings for the year, that is borrowing over and above the estimates announced in the interim Budget, may turn out to be about Rs 30,000-35,000 crore (Rs 300-350 billion), the CMIE said, adding that, at present, total borrowing planned for the year amount to Rs 3,61,782 crore (Rs 3,617.82 billion).
Total government borrowing, including that of states, during the first two months of the current fiscal year amounted to Rs 1,89,691 crore (Rs 1,896.91 billion), about 82 per cent higher than the year-ago period.
The independent research agency said the government expenditure and poor growth in revenue receipts would increase the gross fiscal deficit during the year beyond the budgeted 5.5 per cent. GFD was at 6.1 per cent in 2008-09.
In the interim Budget for 2009-10 presented before the April-May Lok Sabha elections, GFD was estimated at Rs 332,835 crore (Rs 3,328.35 billion).