Finance Ministry Current Affairs - 2020

RBI and Finance Ministry to meet to decide on First Half Borrowing Plan

The Finance Ministry and the Reserve Bank of India is to hold a meeting on March 31, 2020 to discuss about the first half borrowing plan for the year 2020-21. For the first time in Indian history, the meeting is to be held through video conferencing.

The Plan

According to the Union Budget 2020-21, the GoI plans to borrow Rs 5.36 lakh crore rupees. This is higher than last year borrowing which was Rs 4.99 lakh crore. With this, the gross borrowing is to become Rs 7.8 trillion. GoI has planned repayment of loans at Rs 2.35 trillion.

India’s Debts

There are several components of debts of India. The borrowings are mainly accounted as external debt of the country. The external debt of India as of December 2018 is 521 billion USD. This includes money borrowed from international financial institutions, commercial banks, IMF, World Bank, Asian Development Bank, foreign governments, etc.

India’s debts are held in different currencies. 48.2% of the country’s debts are held in dollar, 4.6% as Japanese Yen, 5.7% as Special Drawing Rights, 3.2% in Euros.

Finance Minister announces 102 lakh crore rupees project

On December 31, 2019, Finance Minister Nirmala Sitaraman announced 102 lakh crore worth projects to be implemented in next 5 years. During the announcement, she also released the report of Task Force on National Infrastructure Pipeline for 2019-2025.

Highlights

The infrastructure projects are to be introduced in railways, power, urban, irrigation, health and education. These projects will help India achieve its goal of 5 trillion-dollar economy by 2025. Currently, the GDP of India is 2.72 trillion USD and is growing at the rate of 6.81%

Currently 25 lakh crore rupees energy projects have been lined up. In railway sector, 14 lakh crore rupees of projects are currently being implemented and in health sector 20 lakh crore rupees projects have been lined up. Apart from this, 3 lakh crore rupees projects will be added to pipeline sector.

Significance

Off late, several international financial organizations have been projecting a decline in the growth rate of India. The IMF projected India’s growth rate at 6.1% in 2019 and the world bank projected India’s growth rate at 6%. These projected growth rates were lower than the previous growth rates of the country. Therefore, these new economical measures are important to boost the economy and help India achieve its target.