Borrowing programme scaled up to support capex push even as fiscal consolidation continues
The government on Sunday pegged its net market borrowing at ₹11.73 lakh crore for FY27, which is 3 per cent of GDP, reflecting higher funding requirements to support capital expenditure while keeping the fiscal consolidation roadmap intact. However, the gross borrowings stand at ₹17.20 lakh crore, constituting 4.4 per cent of GDP.
According to budget documents, the Centre’s net market borrowing for FY27 stands at ₹11.73 lakh crore, up from ₹10.7 lakh crore in FY26 (Revised Estimates) and ₹9.0 lakh crore in FY25. The Centre’s gross borrowing has been set at ₹ 17.20 lakh crore. In RE 2025-26, the gross and net borrowings are projected at ₹14.61 lakh crore and ₹10.40 lakh crore respectively.
The government has maintained that the higher borrowing programme is being directed largely towards capital expenditure, which is seen as growth-enhancing and fiscally more productive than revenue spending. Officials argue that this shift has improved the quality of public expenditure.
Economists caution that elevated net borrowings could add to bond supply pressures, but note that the steady decline in the fiscal deficit and the government’s commitment to consolidation are expected to help anchor investor confidence.
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Rajat Mishra leads business news coverage at Firstpost.com. An award-winning business journalist with over seven years of experience, he has worked across some of India’s leading newsrooms. His reporting spans the macroeconomy, financial markets, and India Inc., with a keen focus on decoding complex data and trends for readers.
An alumnus of the AJK Mass Communication Research Centre, Jamia Millia Islamia, Rajat can be followed on X at @RajatMishra9518. For story ideas and pitches, he can be reached at Rajat.Mishra@nw18.com. When not tracking numbers and policy moves, he enjoys wandering the Himalayas and exploring society beyond spreadsheets.
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