The Centre has borrowed Rs 2.1 lakh crore so far this fiscal, a whopping 55 percent more than a year earlier, indicating a huge revenue shortage caused by the second wave of the pandemic, which has prompted many states to declare complete lockdowns for nearly two months now.
The only saving grace has been the low cost of the money collected, which has kept the overall cost of the money for the government under control, despite the steeply higher drawdowns, and at Friday’s auction, it is paying only 6.08 percent, far lower than last year and the same as last week, according to Madan Sabnavis, chief economist at Care Ratings.
He said the market borrowing of Rs 2.1 lakh crore is 17.5% of the full-year budgeted debt formation of Rs 12.05 lakh crore and 30% of the first-half borrowing calendar of Rs 7.24 lakh crore. He went on to say that the Centre’s overall borrowings so far this fiscal year are 55% higher than the same time last year, blaming it on state-level lockouts and the resulting effects on revenue collections.
The government borrowed only Rs 26,550 crore of the Rs 32,000 crore notified in the new borrowing on Friday.
The RBI approved bids worth Rs 19,114 crore, while bids worth Rs 7,437 crore were devolved to the primary dealers.
The total borrowing for the week, however, is Rs 550 crore higher than the notified sum but 30% lower than the previous week. So far this year, Rs 23,398 crore has been spent under the green shoe option, with Rs 18,363 crore going to the primary dealer.
