Union Finance Minister Nirmala Sitharaman Presents Union Budget 2023-24 | Photo credit: PTI

The government plans to borrow a record ₹15.4 lakh crore from dated securities in FY24 to meet its spending needs to support the economy.

This amount is greater than the total borrowing of ₹14.21 lakh crore for the current financial year ending March 31, 2023.

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Finance Minister Nirmala Sitharaman during the budget presentation on February 1 said net borrowing from the dated securities market is estimated at ₹11.8 lakh crore to finance the budget deficit in 2023-24.

“The balance of funding should come from small savings and other sources. Gross borrowing in the market is estimated at ₹15.4 lakh crore,” she said.

The government has raised ₹12.93 lakh crore through January 27, which is 91% of the overall borrowing target of ₹14.21 lakh crore estimated for 2022-23.

Central and state governments’ indebtedness is equal to 83% of annual gross domestic product (GDP).

The Minister of Finance maintained the budget deficit target at 6.4% despite an increase in the subsidy bill.

“By 2023-2024, total revenue other than borrowing and total expenditure are estimated at ₹27.2 lakh crore and ₹45 lakh crore, respectively. Net tax revenue is estimated at ₹23.3 lakh crore,” she said.

It set the fiscal deficit at 5.9 percent of GDP for FY24.

“In my budget speech for 2021-22, I had announced that we planned to continue on the path of fiscal consolidation, reaching a budget deficit below 4.5% by 2025-26 with a fairly steady decline over the period. We have embraced this path and I reiterate my intention to bring the budget deficit below 4.5% of GDP by 2025-26,” she said.

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Ms Sitharaman had pegged gross market borrowing through dated securities for 2022-23 at ₹14,95,000 crore.

However, the government decided in September 2022 to reduce gross borrowing to ₹14.21 lakh crore in FY23. Gross borrowing for 2021-22 was ₹12,05,500 crore.

As for net borrowing, the government has estimated a record amount of ₹11.6 lakh crore from the market in 2022-23.

This was nearly ₹2 lakh crore more than the current year budget estimate of ₹9.7 lakh crore.

Total government borrowing in the market for 2022-23 is estimated at ₹11,58,719 crore, according to the previous budget document.

Revised estimates for the same for 2021-22 are ₹8,75,771 crore against budget estimates of ₹9,67,708 crore.