COVID-19 Crisis : Govt To Borrow 4.2 Lakh Crore in FY 20-21

New Delhi: Due to the fierce impact of coronavirus on the economy, the Centre has said it will borrow about Rs 4.2 crore more than the budgeted estimate of Rs 7.8 lakh crore in the 2020-21 fiscal year.

The fresh borrowing will take the total borrowing estimates of the government to Rs 12 lakh crore.

“The government has estimated Rs 24.23 lakh crore tax collection for the year, but two months of lockdown puts a total of Rs 4 lakh crore under pressure and with not more than 20 per cent attainable through limited activity,” a CARE Rating note read.

Besides this, the government may also fall short to achieve its disinvestment target of Rs 2.1 lakh crore in the current fiscal year.

Therefore, the borrowings would make room for government expenditure and offset the expected revenue shortfall.