INR 5trn needed to boost virus-hit economy: Garg

Finance Secretary Subhash Chandra Garg has stated that government may need to borrow at least 2% of GDP (or about INR 4-5 trillion) additionally for supporting people and businesses hit by the coronavirus and pan-Indian lockdown.

For the current fiscal, the government is planning to borrow INR 7.8 trillion from the market and contain fiscal deficit at 3.5% of the GDP. Of this amount, the government has decided to borrow INR 4.88 trillion during the first half itself.

The secretary observed that unconventional solutions are needed for these unprecedented times. He suggested, “It seems necessary and advisable that the Government of India borrow this directly from the RBI instead of borrowing from the market. The FRBM (Fiscal Responsibility and Budget Management)  Act should be amended to enable this.”