Finance Minister Nirmala Sitharaman Friday said the government will soon tap foreign market to raise funds to meet fiscal deficit which is pegged lower at 3.3 per cent of the GDP for the current financial year.
The government will borrow Rs 4.48 lakh crore from the market in 2019-20, higher than the Rs 4.22 lakh crore in the previous year to meet the fiscal deficit.
The gross borrowing for the current financial year has been raised to Rs 7.1 lakh crore from Rs 5.71 lakh crore in the previous financial year.
Borrowing from the overseas market will be part of the overall borrowing programme of the government.
Presenting the first Budget of the Narendra Modi government in its second term, she said India's sovereign external debt-to-GDP level is among the lowest globally at less than 5 per cent.
"The government would start raising a part of its gross borrowing programme in external markets in external currencies.
"This will also have beneficial impact on demand situation for the government securities in domestic market," Sitharaman said.
Later, addressing media, Finance Secretary Subhash Chandra Garg said this is beginning which has been made.
"We have not decided the exact amount and soon, we will come out with blueprint. So far, only foreigners were allowed to invest in government bonds but it was not issued in the foreign market," he said.
"Since foreign currency-denominated debt is small, we think it's better to diversify to ease pressure on domestic resources," he added.
Chief Economic Adviser K V Subramanian had also on Thursday said cost of capital internationally is low while liquidity is high there.
"As a result, there is opportunity both for the firms and sovereigns as well to think about going and raising money abroad," he had said.
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