The central government will borrow ₹14.13 lakh crore from the markets in 2024–25 to finance its fiscal deficit, Finance Minister Nirmala Sitharaman said in her Budget speech today.
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This is much lower than the ₹15.43 lakh crore gross market borrowing programme announced in Budget 2023 for the financial year 2023-24. So far in this financial year, the government has borrowed about ₹14.08 lakh crores from the markets already.
Government borrowing hit record highs in the last couple of years on the back of the pandemic, as expenditures rose.
Before the pandemic, government market borrowing stood at ₹7.1 lakh crores in the financial year 2019-20. However, with Covid-19 taking hold, expenditures rising and revenues drying up, government gross market borrowing had shot up by 77 percent to ₹12.6 lakh crores by fiscal year 2020–21. By fiscal year 2022-2023, government market borrowing had risen to ₹14.21 lakh crores.
Finance Minister Nirmala Sitharaman has pegged the net market borrowing for fiscal year 2024–25 at ₹11.75 lakh crores.
This is expected to help banks to be able to lend more next year. This will also lead to an increase in the value of government bonds, which would lead to added profits for state-owned banks.The budget estimate for market borrowing for FY24 was ₹11.08 lakh crore.
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| Year | Budget estimate |
| FY25 gross market borrowing | ₹14.1 lakh crore |
| FY25 net market borrowing | ₹11.75 lakh crore |
| FY25 tax receipts | ₹26.02 lakh crore |
| FY25 total expenses | ₹47.66 lakh crore |
This will leave more money in the banks to lend to private sector companies and keep a check on lending rates, Finance Minister Nirmala Sitharaman highlighted in her sixth budget speech.
It’s mandatory for India’s public-sector banks (also called PSU banks) to invest in government securities. When the government says it will cut back on borrowing, it increases the value of the bonds that these banks already hold.
The mark-to-market borrowing will lead to more profits for these banks.A government borrows money from the market to make up for expenses that exceed its total revenue. This is called a fiscal deficit.
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A government borrows money from the market to make up for expenses that exceed its total revenue. This is called a fiscal deficit.
