India likely to fund some $28 billion of 2020-21 expenditure via off-budget borrowings, claims sources
Off-budget borrowings are a means by which the government keeps its fiscal deficit in check by making quasi-government entities borrow on its behalf, to partly fund its expenditure plan for the year.
This would mark a roughly 13.8% increase in so-called off-budget borrowings from an estimated 1.75 trillion rupees ($24.6 billion) in the ongoing fiscal year, said the three sources, who asked not to be named as the discussions are private.
"We`re facing a serious economic crisis," said one of the sources, adding there was no alternative but to raise spending on infrastructure and welfare schemes to boost consumer demand and create jobs.
"You should not be surprised if the real deficit touches 4.5% of GDP," he said, adding the `official` deficit could be kept between 3.5% and 4% of GDP. "After initial denial of the economic slowdown," he said the government has realised it needs to take all possible steps to support economic growth.
