What is Government Borrowing?

Government Borrowing, also known as public interest, public debt, national debt, and sovereign debt. The Finance Ministry has said that the government will borrow Rs 4.34 lakh crore in the second half of the current fiscal to meet its expenditure requirement amid the COVID-19 crisis afflicting the country’s economy. Borrowing is a loan taken by the government and falls under capital receipts in the Budget document. Usually, Government borrows through the issue of government securities called G-secs(Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation) and Treasury Bills(Treasury bills are zero-coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity).

What is the FRBM Act?
The Fiscal Responsibility and Budget Management Act, 2003 is an Act of the Parliament of India to institutionalize financial discipline, reduce India’s fiscal deficit, improve macroeconomic management, and the overall management of the public funds.

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