CAG Criticises Modi Govt For Using Creative 'Off-Budget Financing' Techniques

-TheWire.in

The national auditor believes that such methods allow the Centre to understate the true fiscal and revenue deficits in a given year.

New Delhi:
India’s national auditor has raised red flags over the Narendra Modi government’s propensity to borrow funds using “off-budget” methods, a practice that allows it to finance capital and revenue spending while maintaining deficit targets.

The criticism comes from an audit report tabled in parliament on Tuesday, but is a continuation of the manner in which the Comptroller and Auditor General (CAG) has questioned the Centre for severely understating the true extent of the country’s fiscal and revenue deficits.

“It came to notice that the Government resorts to off-budget methods of financing to meet revenue and capital requirements. The quantum of such borrowings is huge and current policy framework lacks transparent disclosures and management strategy for comprehensively managing such borrowings,” the most recent audit report notes.

Where exactly are these off-budget methods of financing taking place? Everything from fertiliser bills to financing power projects.

The CAG notes: “In terms of revenue spending, off-budget financing was used for covering deferring fertilizer arrears/bills through special banking arrangements; food subsidy bills/arrears of FCI through borrowings and for implementation of irrigation scheme (AIBP) through borrowings by NABARD under the Long Term Irrigation Fund (LTIF).”

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TheWire.in, 9 January, 2018, https://thewire.in/government/cag-criticises-modi-govt-for-using-creative-off-budget-financing-techniques

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