The rising uncertainty of the coronavirus spread has left the government baffled. As an audacious step to curb the disease, the government has decided to raise its gross market borrowing target for the current financial year to Rs. 12 Lakh crore. It was previously set at Rs. 7.8 Lakh crore attributing the amplification of more than half to the coronavirus outbreak that has put the economy at a standstill.
According to the excuses the exasperated borrowing is possible because of amalgamation of lower tax collections and the fiscal stimulus needed to uplift the economic turbulence. Government It is also expected to peg the fiscal stimulus at Rs. 5 Lakh crore. This accounts for 2.5% if the Indian Gross Domestic Product.
In a statement issued on Friday the finance ministry announced the new borrowing schedule. It said, “The above revision in borrowings has been necessitated on account of the covid-19 pandemic. ”
The government has already declared a fiscal support package of RS. 1.7 Lakh crore and there is expectation of a more giant stimulus programme in the near future. The tax revenue anticipated to suffer a major drawback from the lockdown.
Moody rating agency has also forecasted a zero percent growth in financial year 2020-21. This comes after its March estimation of 2.5% growth.