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Zorluk: ZorEconomic Developments, Union & State Budgets, and Economic Surveys

With reference to fiscal accounting conventions, borrowing limits, and Union-State financial arrangements highlighted in recent Union Budgets and Finance Commission reports, consider the following statements:

1. Extra-Budgetary Resources (EBRs) raised by state-owned entities where principal and/or interest is serviced from the state budget are adjusted against the Net Borrowing Ceiling (NBC) of the respective State.
2. The 15th Finance Commission recommended an additional borrowing space of 0.5%0.5\% of Gross State Domestic Product (GSDP) for States contingent upon carrying out structural reforms in the power sector.
3. Interest-free 50-year loans granted by the Central Government to States under the Special Assistance for Capital Investment scheme are counted within the normal annual fiscal deficit ceiling of 3%3\% GSDP.

Which of the statements given above is/are correct?

  1. 1 and 2 onlyCevap
  2. B
    1 and 3 only
  3. C
    2 and 3 only
  4. D
    1, 2 and 3

Cevap

1 and 2 only
The statement set correctly recognizes that off-budget liabilities serviced from state revenues are included under the Net Borrowing Ceiling (NBC) to enhance fiscal transparency, and that power sector reforms allow an extra 0.5% GSDP borrowing headroom. Conversely, 50-year interest-free capital loans are provided as additional assistance outside the standard borrowing cap of 3% GSDP.

Adım Adım Çözüm

1
Evaluate Statement 1 regarding Extra-Budgetary Resources (EBRs) and the Net Borrowing Ceiling (NBC).
Statement 1 is correct.
Under Article 293(3) guidelines, off-budget borrowings raised by state PSUs/SPVs serviced via state budget allocations are included within the State's Net Borrowing Ceiling to ensure comprehensive reporting of public debt.
2
Evaluate Statement 2 regarding 15th Finance Commission recommendations on performance-linked borrowing.
Statement 2 is correct.
The 15th Finance Commission recommended allocating an additional borrowing limit of 0.5% of GSDP for States, tied directly to power sector performance metrics like AT&C loss reduction and direct benefit transfers.
3
Evaluate Statement 3 regarding the 50-year interest-free loan scheme for capital investment.
Statement 3 is incorrect.
The Scheme for Special Assistance to States for Capital Investment provides 50-year interest-free loans over and above the normal borrowing limits (3% of GSDP) allowed to States.

Anahtar Kavram

Net Borrowing Ceiling, Off-Budget Borrowings Accounting, and State Fiscal Assistance Framework
Tahmini Süre:2m 0s
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Konular

Economic Developments, Union & State Budgets, and Economic Surveys

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