Former Union finance minister P Chidambaram on Saturday welcomed the Central government's decision to borrow an additional Rs 4.2 lakh crore, saying that the funds should be used to provide relief to the poor and restart the economy to tide over the Covid-19 crisis.

"After resisting our appeals, especially through statements of the CEA (chief economic adviser), the government has finally decided to borrow an additional amount of Rs 4.2 lakh crore, taking the projected fiscal deficit to 5.38%. We welcome the decision," Chidambaram said in a statement.

However, he added: "It is not enough to borrow more unless the amount is used to provide relief to the poor and to restart the economy. We look forward to the revised expenditure budget for 2020-21."

Echoing the views of several eminent economists, the senior Congress leader had earlier appealed to the Centre to shed its reservations and borrow more in 2020-21.

"In our view, the budgeted fiscal deficit of 3.5% should not be a constraint in these extraordinary times," he said.

The government on Friday revised its gross market borrowing target from the estimated Rs 7.8 lakh crore to Rs 12 lakh crore in view of the coronavirus pandemic.

The estimated gross market borrowing in the fiscal 2020-21 will be Rs 12 lakh crore, in place of Rs 7.8 lakh crore according to the budget estimates for 2020-21. The revision in borrowings was necessitated due to the Covid-19 pandemic, the finance ministry said in a statement.

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