[Jan] Off Budget Liabilities / Off Budget Borrowings / extra budgetary borrowings

Question 1

What is it?

Answer 1

Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution which borrows on the directions of the central government.

Such borrowings are used to fulfil the government’s expenditure needs.

But since the liability of the loan is not formally on the Centre, the loan is not included in the national fiscal deficit.