12/28/2017 3:16:13 PM
|written By : Team India Se|
India will borrow an additional 500 billion rupees (US$7.79 billion) this fiscal year, raising fears the move could breach the fiscal deficit target for the first time in four years and hit the bond and equities markets.
The announcement by the finance ministry comes weeks after Moody’s Investors Service upgraded India’s sovereign credit rating for the first time in nearly 14 years.
Analysts said the additional borrowing could raise the fiscal deficit to 3.5 per cent of the gross domestic product, against Finance Minister Arun Jaitley’s stated target of 3.2 per cent.
India is having to raise the extra funds as the federal government has already spent over US$200 billion in eight months to October, about 60 per cent of the budgeted spending, while revenue collections were just 48 per cent of the target.
The government’s tax collection plunged after the launch of the national Goods and Services Tax (GST) in July that complicated tax filings for business and hit the economy.