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Govt borrowings estimated at Rs 1,00,000 crore
The government total borrowing requirements are expected to be Rs 1,00,000 crore or 6 per cent of the national income. A sequel to last year’s Voluntary Disclosure of Income Scheme (VDIS) is expected to be undertaken to raise much needed funds for infrastructural development. The government is expected to issue bonds at either nominal interest rates or no interest at all. Subscribers may not be required to disclose the source of their funds. Unlike the last VDIS the bond will not involve the payment of 30 per cent tax. The government’s domestic borrowings are estimated at Rs 55,000 crore. This will slow down investment and industrial development as it will draw resources away from private investors and raise interest rates. The high level of government borrowings could also put pressure on the price line since the dependence on deficit financing is also expected to increase.