The government will be paying much more as interest on previous borrowings than the total loans it proposes to raise during 2007-08.

Finance Minister P Chidambaram proposed a total interest payment of Rs 1,58,995 crore (Rs 1,589.95 billion) during 2007-08, while it would be raising a debt of Rs 1,50,948 crore (Rs 1,509.48 billion) to finance the fiscal deficit.

The interest payment, a part of debt servicing mechanism, constitutes as much as 32.7 per cent of the total revenue receipts, the Budget proposals for 2007-08 said.

The total revenue receipts have been pegged at Rs 4,86,422 crore (Rs 4864.22 billion) in 2007-08.

Although in percentage terms, the interest payment to revenue receipts has come down to 32.7 per cent for the next fiscal from 34.7 per cent in 2006-07, in absolute terms the quantum of interst payment has gone up to Rs 1,58,995 crore (Rs 1589.95 billion) from Rs 1,39,823 crore (Rs 1398.23 billion).

The repayment of loan has also gone up to Rs 2,62,224 crore (Rs 2,622.24 billion) from Rs 2,49,196 crore (Rs 2491.96 billion) in current fiscal.

Among the debt receipt instruments, government would be raising Rs 1,09,579 crore (Rs 1095.79 billion) as market loans as against Rs 1,13,778 crore (Rs 1137.78 billion) in 2006-07.

Short-term borrowing of the government has been pegged at Rs 1,748 crore (Rs 17.48 billion) in 2007-08.