What is meant by Extra budgetary borrowings? How it is contributing the Indian economy to move towards the path of fiscal consolidation and greater transparency? Discuss (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· The extra-budgetary funds refers to public resources and government transactions that are not included in the annual budget.
· The government needs to be commended for increasing transparency and disclosing off-Budget borrowings as the markets will now have a better picture of government finances.
· While the government has indeed taken a step forward by disclosing the expenditure, it clearly needs to do more to build trust in government finances.
· Some of the government schemes for which proceeds from EBRs have been utilised so far are Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Deen Dayal Upadhayay Gram Jyoti Yojana (DDUGJY), Swachh Bharat Mission (SBM), Pradhan Mantri Awas Yojana (PMAY).
· Institution-wise break up of borrowings made through EBR route reveals that the top three borrowers are National Bank for Agriculture and Rural Development (NABARD), which has borrowed for both rural development and irrigation projects.
· The release of information on EBRs in the public domain through the Union Budget 2019-20, has significantly enhanced fiscal transparency in India as per the report of Reserve bank of India.
· The provision of funds through extra-budgetary sources does bring down the stated fiscal deficit resulting in fiscal consolidation.
