The Government has announced to lower the additional borrowing requirement for the current fiscal to Rs _____ crore from Rs 50,000 crore as estimated in December 2017.a)Rs 40,000 croreb)Rs 10,000 crorec)Rs 30,000 crored)Rs 20,000 croreCorrect answer is option 'D'. Can you explain this answer?

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The Government has announced to lower the additional borrowing requirement for the current fiscal to Rs _____ crore from Rs 50,000 crore as estimated in December 2017.

a)
Rs 40,000 crore
b)
Rs 10,000 crore
c)
Rs 30,000 crore
d)
Rs 20,000 crore

Correct answer is option 'D'. Can you explain this answer?

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The Government has announced to lower the additional borrowing require...

Explanation:

The Government has announced to lower the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore as estimated in December 2017. This decision has been taken due to the improved fiscal situation and the government's efforts to control the fiscal deficit.

Reasons for lowering the additional borrowing requirement:

1. Improved fiscal situation: The government has been able to improve its fiscal situation by increasing revenue through various measures such as the implementation of the Goods and Services Tax (GST) and demonetization. These efforts have helped in reducing the fiscal deficit and the need for additional borrowing.

2. Control over fiscal deficit: The government has been focused on controlling the fiscal deficit, which is the difference between the government's total expenditure and its total revenue. By lowering the additional borrowing requirement, the government aims to reduce the fiscal deficit and maintain fiscal discipline.

3. Economic growth: The Indian economy has been experiencing robust growth in recent years, which has led to increased tax revenues for the government. This has reduced the need for additional borrowing to fund the government's expenditure.

4. Market conditions: The government has also taken into consideration the prevailing market conditions while deciding to lower the additional borrowing requirement. Lowering the borrowing requirement will help in maintaining stability in the financial markets.

5. Investor confidence: By reducing the additional borrowing requirement, the government aims to boost investor confidence in the Indian economy. This will attract more investments, both domestic and foreign, and contribute to the overall economic growth.

Impact of lowering the additional borrowing requirement:

1. Reduced interest burden: Lowering the additional borrowing requirement will help in reducing the interest burden on the government. This will free up funds that can be used for developmental activities and other priority areas.

2. Better debt management: By lowering the borrowing requirement, the government will be able to manage its debt more effectively. This will help in maintaining the sustainability of public finances and reduce the risk of default.

3. Positive signal to the market: The decision to lower the additional borrowing requirement sends a positive signal to the financial markets. It shows the government's commitment to fiscal discipline and stability, which is likely to be appreciated by investors.

4. Fiscal consolidation: Lowering the additional borrowing requirement is a step towards achieving fiscal consolidation. It will help in reducing the fiscal deficit and bring the government's finances on a more sustainable path.

In conclusion, the government's decision to lower the additional borrowing requirement to Rs 20,000 crore from Rs 50,000 crore is a positive step towards fiscal consolidation and maintaining stability in the financial markets. It reflects the government's efforts to control the fiscal deficit and improve the overall fiscal situation.

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The Government has announced to lower the additional borrowing requirement for the current fiscal to Rs _____ crore from Rs 50,000 crore as estimated in December 2017.a)Rs 40,000 croreb)Rs 10,000 crorec)Rs 30,000 crored)Rs 20,000 croreCorrect answer is option 'D'. Can you explain this answer?

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