AIR 1 · CSE 2024 · GS3 · 53 pages

Shakti Dubey: GS3 answer copy

20 answers by Shakti Dubey, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 157 words written

What do you mean by off-budget borrowings? Discuss the various issues associated with them.

Opening · a constitutional or legal provision

CAG and 15th Finance commission have red-flagged the issue of off-budget Borrowing and has asked the Government to put an end to it.

Body · points

OFF-BUDGET BORROWINGS :

These are the borrowings done by state run agencies to implement government policies and schemes, which is outside the traditional budgetary allocations done by the Government.

Issues related with them :-

Government usually opts for off-budget borrowing to keep it's fiscal deficit below 3% (FRBM Act) - This has issues like :-

(1) It evades the scrutiny of parliamentary channel (2) This puts extra pressure on the exchequer without being reflected in audits (3) Increases debt-to-GDP ratio (4) It creates a scope of mismanagement of public fund (5) Decreases transparency & accountability of the government (6) It highlights the loophole in fiscal management & the FRBM Act

Close · a way forward

Thus, in order to ensure Fiscal responsibility such routes must not be opted by government as it increases Public debt and creates fiscal mismanagement