© Reuters. A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad, India, September 20, 2018. REUTERS/Amit Dave/ File Photo

By Sarita Chaganti Singh and Aftab Ahmed

NEW DELHI (Reuters) – India’s federal government may keep its gross market borrowing for 2024/25 close to this fiscal year’s level, according to two government sources, as it looks to rein in its borrowings that have more than doubled, mainly due to pandemic spending.

India may peg its gross market borrowing for next fiscal year at between 15 trillion rupees ($180.47 billion) and 15.5 trillion rupees, when Finance Minister Nirmala Sitharaman presents the federal budget on Feb. 1, the two officials aware of the development told Reuters.

That is close to its 15.43 trillion rupees target for the current fiscal year that ends on March 31. Of that, the government has raised about 14.08 trillion rupees, or about 91%, as of Jan. 22.

But that is already roughly double its gross market borrowings of 7.1 trillion rupees in 2019/20, just before the COVID-19 pandemic.

“The government is serious about reducing its market borrowings this fiscal year,” one of the officials said.

Both the officials did not want to be named as they are not allowed to speak to the media about budget plans, which are in the final leg of discussions before they are unveiled next week.

The likely gross borrowing figures are also close to economists’ estimate of 15.6 trillion rupees, according to a Reuters poll.

Despite being an election year where Prime Minister Narendra Modi is bidding for a rare third straight term in power, the government is likely to rein in its fiscal deficit by at least 50 basis points by capping its spending on welfare schemes and subsidies.

The Reuters poll also showed economists expect the government to reduce its fiscal deficit to 5.3% of gross domestic output in 2024/25, from 5.9% this year.

India’s finance ministry did not immediately reply to an email and a message seeking comments. ($1 = 83.1180 Indian rupees)

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