The government in May had increased its market borrowing programme for the current financial year by more than 50 per cent to Rs 12 lakh crore to meet the increased spending due to the COVID-19 pandemic.
The government on Monday said there will be no change in the borrowing programme for the current fiscal, even as it announced steps to stimulate consumer demand during the festival season. The government in May had increased its market borrowing programme for the current financial year by more than 50 per cent to Rs 12 lakh crore to meet the increased spending due to the COVID-19 pandemic.
As part of its efforts to stimulate the economy, Finance Minister Nirmala Sitharaman announced a slew of measures to spur demand and ramp up capital expenditure. Sitharaman said Rs 36,000 crore additional consumer demand will be created (Rs 28,000 crore through LTC voucher scheme plus Rs 8,000 crore through festival advance scheme). Also, Rs 37,000 crore of additional central and state capital expenditure will be incurred.
Total boost to demand is estimated at Rs 73,000 crore by March 31, 2021, she added. Due to additional measures announced by the government, there will be no change in the borrowing target for the current fiscal, said Economic Affairs Secretary Tarun Bajaj during the media interaction post announcement of stimulus targeted at boosting consumption.
“We have taken into account estimates for the stimulus that we would be taking. At this point of time, our estimate remains at Rs 12 lakh crore for the current fiscal,” he said. Asked how the Centre will ensure spending by people especially government employees, Bajaj said schemes are designed in such a way that you are incentivised for spending.
“The scheme details will ensure that you will get the benefit only if by March 31, 2021 you are able to spend the money. If you spend less of money, you will get less of benefit,” he added. This is the third stimulus package since the outbreak of the COVID-19 pandemic. The government announced Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Yojana (PMGKP) in March to protect poor and vulnerable from the impact of COVID-19 crisis.
It was followed by Aatmanirbhar Bharat Abhiyan package of Rs 20.97 lakh crore in May, largely focussed on supply side and long-term reforms.