OFF-BUDGET BORROWINGS
WHY IN NEWS?
- Recently Telangana Finance Minister T. Harish Rao accused the Centre of “creating hurdles after hurdles” in the development of the State.
- He said that the State had resorted to off-budget borrowings to complete irrigation projects in the shortest time but the Centre had imposed borrowing limits.
- As extra-Budgetary borrowings find no mention in the Budget documents, one has to rely on the CAG reports to ascertain the figures.
- Five Southern States — Telangana, Andhra Pradesh, Kerala, Tamil Nadu and Karnataka — accounted for ₹2.34 lakh crore, around 93%, of the total off Budget liabilities of eleven major States analysed.
- As of March 2021, Telangana had the highest burden of such loans followed by Andhra Pradesh.
OFF BUDGET BORROWINGS :
- Off Budget borrowings are loans obtained by government entities, such as PSUs or special purpose vehicles, on behalf of the government to finance its expenditure.
- These borrowings are not included while computing the debt and the fiscal deficit of the State governments.
- The State government is responsible for repaying the loan and servicing the debt from its Budget.
SYLLABUS : PRELIMS, INDIAN ECONOMY