Thursday, January 10, 2019

Off-budget financing

Off Budget borrowings is a serious fiscal concern. Know more about government structuring its finances by reading this article. You heard of unique way of doing Divestments via ONGC-HPCL deal..the debt on PSUs 🤐
"Such arrangements mean normal government expenditure was being substituted with loans in the accounts of PSUs instead of cash on fears of fiscal slippage. In FY19, the Centre has lined up plans to raise a massive `1.7 lakh crore extra-budgetary resources (EBR) via FCI, NABARD, REC, PFC, NHB, HUDCO and HEFA, up 110% from FY18. These loans will have to be serviced out of the Budget later"
Related to the post, here is an interview of former Finance Secretary S Narayan on the same topic
"Carry over of subsidy expenditure by governments has continued for decades but the proportion of carry over must be watched, says former Finance Secretary S Narayan"

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