The Hindu Editorial Analysis: The editorial analysis of The Hindu Newspaper Editorial Articles aimed at simplifying various concepts relevant to the UPSC and other State PSC Exams. The Editorial Analysis helps in expanding the knowledge base as well as framing better quality mains answers. Today’s Hindu Editorial Analysis looks into the off-budget borrowings of the states in India.
While tabling the Budget a week ago, Telangana Finance Minister T. Harish Rao accused the Centre of “creating hurdles after hurdles” in the development of the State.
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.
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.
The CAG’s contention is that resorting to extra-budgetary resources will lead them to a debt trap. In almost all States, if the off-Budget loans were added to their declared debt, it can take their debt-to-GSDP ratio even further away from State targets.
1. What is Off-budget borrowings?
Ans. 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.
2. What is the impact of Off-budget borrowings on state finances?
Ans. The CAG’s contention is that resorting to extra-budgetary resources will lead them to a debt trap. In almost all States, if the off-Budget loans were added to their declared debt, it can take their debt-to-GSDP ratio even further away from State targets.
3. Which state has recently included its off-budget borrowings in in its debt calculation?
Ans. Karnataka accounts its off-Budget borrowing in its debt calculation, unlike the others.
Union Budget 2023-24, Key Provisions
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.
The CAG’s contention is that resorting to extra-budgetary resources will lead them to a debt trap. In almost all States, if the off-Budget loans were added to their declared debt, it can take their debt-to-GSDP ratio even further away from State targets.
Karnataka accounts its off-Budget borrowing in its debt calculation, unlike the others.
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