India Budget 2019: Prime Minister Narendra Modi’s government will spend Rs 10 lakh crore in this financial year on interest payment and repayment of loan. This amount is more than one third of the total budgeted expenditure of the Union government for the fiscal. This huge loan burden leaves little money for the development work as the government has pegged its capital expenditure at little over Rs 3 lakh crore which is just one third of its loan repayment requirement in 2019-20.
In the interim budget for the current fiscal, the Union government has estimated that it will need to borrow Rs 7.03 lakh crore to meet its expenditure. However, Rs 6.65 lakh crore or almost 95% of the total loan will be used in the interest payment for existing loan liabilities of the central government.
In addition to the interest payment of Rs 6.65 lakh crore, the Union government also needs to pay Rs 3.36 lakh crore this year on repayment of market loans that will become due for discharge in the fiscal. The government will pay Rs 2.5 lakh crore this year on the government stock that carries the interest component ranging from 6.05% to 10.03%.
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Repayment of Rs 1.35 lakh crore become due in January next year, while remaining Rs 1.15 lakh crore to be paid in 2019.
Also, the government will spend Rs 1 lakh crore on the buyback of government stock and switching of securities in this fiscal, taking the total figure to Rs 3.5 lakh crore. After adjustment of switching of stocks between 2018-19 and 2019-20, the total loan discharge liabilities and buyback of government stocks and securities works out to be in excess of Rs 3.36 lakh crore.
Modi government will pay Rs 10.01 lakh crore in 2019-20 on interest payment and discharge of market loans.
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