A man holds a bag of budget papers at Parliament House before tabling of the budget in parliament in New Delhi, India. (Photographer: T. Narayan/Bloomberg)  

Off-Budget Financing An Effort To Streamline Expenses, Says CEA

The sudden jump in the off-budgetary resources as seen in the interim budget presented by Finance Minister Piyush Goyal on Friday are the government’s attempts to improve returns and streamline its expenses, India’s Chief Economic Adviser Krishnamurthy Subramanian said.

“Providing for some of the important investments through budgetary resources would actually take time...[as compared to] investments through off-balance sheet financing,” Subramanian told BloombergQuint in a post-budget interaction.

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When these investments are made in relevant sectors, where the fiscal multipliers are significant, one can generate better returns than having to wait for the budgetray resources to be created, he added.

When asked about the large borrowings by the Food Corporation of India due to build-up of subsidy arrears, Subramanian said that “the government is trying to make the best effort to ensure that these subsidies are targeted better.” He noted that the money raised through the FCI or other public sector enterprises is aimed at streamlining expenditures.

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Watch the full interaction here: