Record-Breaking Borrowing in Next Fiscal Plan
- Posted on January 23, 2023
- By Akta Yadav
- 77 Views
Is the Borrowing in Fiscal Plan 2023-2024 India Going to Break the Record? The Indian government is planning to borrow a record 16 trillion rupees in the fiscal year 2023/24, according to a Reuters poll. This staggering amount is equivalent to $193 billion and represents a significant increase from the previous fiscal year. But why is the government borrowing so much? The answer lies in the country's struggling economy. India's GDP growth has been sluggish, and the government is now looking to borrow more to cushion consumers from rising inflation and to boost economic growth. Borrowing in Fiscal Plan According to B Prasanna, global head-global markets-sales, trading and research at ICICI Bank, the government's fiscal deficit are expected to reach 5.9% of GDP, the highest it has been in years. This is a cause for concern for many experts, as India's debt is already staggering. In 2021, India's debt was around 147 lakh crores against that year's estimated GDP of 194 lakh crore. And now, with plans to borrow an additional 12 lakh crore, the situation is only set to worsen. But it's not all bad news. The government is also considering spending an additional 2 trillion rupees in the 2023/24 fiscal year to fight inflation and boost economic growth, according to a report by Reuters. Borrowing in Fiscal Plan However, the question remains, is this enough to revive the economy? Prime Minister Modi's avowed GDP target of a $5 trillion economy by 2025, or roughly $3 trillion after adjusting for inflation, seems like a pipe dream now. The government's record borrowing plan may be necessary to revive the economy, but it's also a matter for concern. As the country's debt continues to soar, experts are questioning whether the government's actions will be enough to pull the economy out of its slump. Only time will tell.