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breaking news Center may consider additional borrowing of Rs 1 Lakh Crore after tax relief measures

The central government may consider additional borrowing to fill the fiscal gap, following its latest announcements of excise and customs duty exemptions, people familiar with the matter said. CNBC-TV18.

The Center may consider borrowing more than Rs 1 lakh crore this financial year, the sources added.

On Saturday, the Center decided to reduce the central excise duty on petrol by Rs 8 per liter and on diesel by Rs 6 per litre. Revenue lost on petrol and excise cuts on diesel are estimated at Rs 1 lakh crore, sources said.

On Saturday, the government also reduced tariffs on raw materials and intermediaries for plastic products where India’s reliance on imports is high. “This will lead to a reduction in the cost of end products,” Finance Minister Nirmala Sitharaman said on Saturday. Revenue foregone from the change in tariffs is widely estimated at Rs 20,000 crore, sources said.

Current income is more than enough to meet the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) and fertilizer subsidies, sources said.

The sources said larger borrowings are needed to deal with the overall loss of revenue from the tax cuts.

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