OFF-BUDGET BORROWINGS

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

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