Explain the meaning of off-budget borrowings and its role in helping the government raise funds for various expenditures. Also, comment on its desirability.

Off-budget borrowings are borrowings not undertaken by central directly rather via other governmental bodies like public sector enterprises PSEs. They are these not calculated as part of borrowings during budgeting. Role in raising government funds: 1. Borrowing from any channel helps meet fiscal deficit of government 2. Extra funds allow space for various social, welfare expenditures. 3. Since they are not part of budget calculations, do not create pressure of increasing loans. 4. Though the government has to pay interest on it, they by then need do not come under radar. Though it helps governments raise funds easily for welfare functions, these should not be come 'norm'. It is to be used as medicine not food. ICTH FC guidelines should be followed here.

14th Finance Commission recently in its relevant asked centre & states to disclose their off-budget borrowings. It is because of unfixed ability to: 1. Debt created, future liability in form of interest. 2. This is 'hidden' and opaque front of transparency & accountability 3. It is meant to shoot fiscal deficit limits under FRBM act 2003. 4. Does not show real economics stand. Though it helps governments raise funds easily for welfare functions, these should not be come 'norm'. It is to be used as medicine not food. ICTH FC guidelines should be followed here.