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Off-budget borrowings of states
August 22 , 2025
17 hrs 0 min
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- Off-budget borrowings (OBB) rose to ₹29,335 crore in FY25 from ₹21,251 crore in FY24.
- Off-budget borrowings had peaked at ₹67,181 crore in FY21 during the Covid-19 pandemic.
- The central government discontinued its own off-budget borrowing practices from FY23.
- Since FY22, the Centre has included debt raised by state-owned entities under Article 293(3) borrowing limits.
- States are opting for the Centre’s Special Assistance to States for Capital Investment (SASCI) scheme offering 50-year interest-free loans.
- A CareEdge Ratings report says budgets of 13 major states project a 3.2% fiscal deficit in FY26.
- Maharashtra topped off-budget borrowings in FY25 at ₹13,990 crore, followed by Karnataka at ₹5,438 crore.
- Telangana and Kerala recorded ₹2,697 crore and ₹983 crore, respectively, in FY25.
- In FY24, Maharashtra had ₹7,700 crore in off-budget borrowings, followed by Kerala at ₹4,688 crore.
- States like Madhya Pradesh, West Bengal, and Uttar Pradesh rely heavily on central government transfers.
- Richer states like Haryana, Telangana, Karnataka, Tamil Nadu, and Maharashtra finance most of their budgets through their revenues.
- States use off-budget borrowings to fund welfare schemes and infrastructure without breaching fiscal deficit targets.
- Maharashtra and Tamil Nadu each borrowed over ₹1.2 lakh crore through open market sources in FY25.
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