As the maximum investable amount of the senior citizen savings scheme (SCSS) rose from ₹15 lakh to ₹30 lakh in the Budget 2023, it could add ₹75,000 crore to the government’s kitty, reported Business Standard.
This will help the government avoid overshooting the projected net market borrowing of ₹11.8 trillion for FY24, said a government source.
According to government sources, there are 5 million accounts under SCSS, of which 500,000 had hit the previous upper limit of ₹15 lakh.
“If just 10 per cent of account holders increase their deposits to ~30 lakh, that will mobilise ₹75,000 crore. With the kind of allocation made to the Indian Railways, the National Highways Authority of India (NHAI), and state governments, there is no reason for them to come to the market,” said a government official, wrote BS.
“As a result, the ₹11.8 trillion of net borrowing in the next fiscal year will not be breached. The higher allocation to the Railways and highways will also crowd in private investment,” the person said.
In the Budget, the government announced record capital expenditure of ₹2.6 trillion for the next fiscal year.
The government’s share will contribute around ₹2.4 trillion — the highest ever — with Finance Minister Nirmala Sitharaman saying the outlay was nearly ninefold 2013-14’s.
The allocation to NHAI has been increased to ₹1.62 trillion. In the Budget, the government announced a gross market borrowing of ₹15.4 trillion and a net market borrowing of ₹11.8 trillion, which were largely in line with expectations.
The gross borrowing for the current fiscal year (2022-23, or FY23) is ~14.21 trillion, while net borrowing is ₹11.19 trillion. The fiscal deficit target for FY24 has been pegged at 5.9 per cent of gross domestic product (GDP).
While the government has adhered to fiscal consolidation by bringing down the fiscal deficit target from 6.4 per cent in the current year, there are concerns about a possible loss of growth momentum affecting the government’s revenue streams.
The Reserve Bank of India has projected India’s GDP growth rate at 6.4 per cent for FY24, lower than the growth projection of 6.8 per cent for FY23. The central bank said while strong prospects for agricultural and allied activities will boost rural demand, external demand will likely slow due to a weak global environment.