Off-Budget borrowing
Govt says states' off-Budget borrowing jumped 38% to INR 293 bln in FY25
This story was originally published at 15:52 IST on 22 July 2025
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NEW DELHI – Off-Budget borrowing by state governments jumped 38% to INR 293.36 billion in 2024-25 (Apr-Mar), according to Minister of State for Finance Pankaj Chaudhary. Loans raised by government entities and public sector enterprises on behalf of the government, which are not accounted for in the Budget document and do not reflect on fiscal deficit, are off-Budget borrowings.
The central government, which raised funds through off-Budget borrowings till FY22, has completely abandoned the practice now, as it is fiscally imprudent and opaque. The Centre has also been encouraging state governments to follow the lead.
"In order to curb the off-budget borrowing and bring fiscal discipline among states, with effect from FY22, borrowings made by 'state owned entities', where principal and/or interest is serviced through state Budgets and/or assignment of taxes/cess or any other state's revenue, are factored in for the purpose of issuance of borrowing consent (from the Centre) to state governments," Chaudhary said in a written response to a question in the Rajya Sabha on Tuesday. End
Reported by Krity Ambey
Edited by Avishek Dutta
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