UPDATE 1-India pegs fiscal deficit at 5.9% of GDP, gross borrowing at 15.43 trillion rupees

(Updates with details)

MUMBAI, Feb 1 (Reuters) - India's federal government will target a budget deficit of 5.9% of GDP for 2023/24, Finance Minister Nirmala Sitharaman said in her budget speech on Wednesday, while pegging gross market borrowing at an estimated 15.43 trillion rupees.

The fiscal deficit for the fiscal year ending March 31, 2023 was at 6.4%, according to the revised estimates. A Reuters poll had said budget gap was expected at 6% of GDP.

The government's budget gap, which hit a high of 9.5% of GDP in 2020/21 as the spread of COVID-19 infections brought the economy to a halt, has narrowed since but remains well above the medium-term goal of 4.5% of GDP by 2025/26.

Gross market borrowing is estimated at 15.43 trillion rupees ($189 billion), Sitharaman said, while net borrowing was seen at 11.81 trillion rupees. The net borrowing excludes 781 billion rupees of bonds given to states on account of compensation for a shortfall in goods and services tax, reducing the repayments due next year.

New Delhi also aims to switch bonds worth 1 trillion rupees next year, after switching bonds worth 1.03 trillion rupees this year.

For the year, the government is targeting an 11.4% growth in net tax revenue to 23.3 trillion rupees.

Expenditure is seen rising 7.4% over a year ago to 45 trillion rupees, with longer term capital spending budgeted to rise 33% to 10 trillion rupees. ($1 = 81.8100 Indian rupees)

(Reporting by Ira Dugal; Editing by Saumyadeb Chakrabarty and Nivedita Bhattacharjee)