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Consider the following statements regarding Off-budget borrowing.
1. Off-budget loans are loans made under the control of the central government by any public entity.
2. Off-budget borrowing helps keep the country's fiscal deficit within acceptable limits.
1. Off-budget loans are loans made under the control of the central government by any public entity.
2. Off-budget borrowing helps keep the country's fiscal deficit within acceptable limits.
3. Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.
4. Public sector banks can fund off-budget expenses.
4. Public sector banks can fund off-budget expenses.
Which of the above statements is/are correct?
- a)1, 2 and 3 only
- b)1, 2 and 4 only
- c)1 and 2 only
- d)All of the above
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding Off-budget borrowing.1.Off...
- 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. This helps keep the country's fiscal deficit within acceptable limits.
- Comptroller and Auditor General report of 2019 points out, this route of financing puts major sources of funds outside the control of Parliament. "Such off-budget financing is not part of the calculation of the fiscal indicators despite fiscal implications," said the report.
- The government can ask an implementing agency to raise the required funds from the market through loans or by issuing bonds. In the Budget presentation for 2020-21, the government paid only half the amount budgeted for the food subsidy bill to the Food Corporation of India. The shortfall was met through a loan from the National Small Savings Fund.
- Public sector banks are also used to fund off-budget expenses. For example, loans from PSU banks were used to make up for the shortfall in the release of fertiliser subsidy.
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Consider the following statements regarding Off-budget borrowing.1.Off...
Statement 1: Off-budget loans are loans made under the control of the central government by any public entity.
This statement is correct. Off-budget loans refer to loans taken by public entities that are under the control of the central government. These loans are not directly included in the central government's budget but are considered as part of the overall debt and liabilities of the government.
Statement 2: Off-budget borrowing helps keep the country's fiscal deficit within acceptable limits.
This statement is correct. Off-budget borrowing is often used by governments to finance certain expenditures without directly affecting the fiscal deficit. By keeping certain expenditures off-budget, the government can create the impression of a lower fiscal deficit, which is an important indicator of the government's financial health.
Statement 3: Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.
This statement is incorrect. Off-budget financing does have fiscal implications as it affects the overall debt and liabilities of the government. While it may not be directly included in the calculation of certain fiscal indicators, it still contributes to the government's financial position and can impact its ability to meet its obligations.
Statement 4: Public sector banks can fund off-budget expenses.
This statement is correct. Public sector banks can provide funding for off-budget expenses. These expenses are often related to specific government initiatives or projects and are financed through loans from public sector banks. However, it is important to note that such funding should be within the regulatory framework and guidelines set by the central bank and other relevant authorities.
In conclusion, statements 1, 2, and 4 are correct while statement 3 is incorrect. Off-budget loans are loans made under the control of the central government by public entities, and they help keep the country's fiscal deficit within acceptable limits. Off-budget financing does have fiscal implications, and public sector banks can fund off-budget expenses within the regulatory framework. Therefore, the correct answer is option B.
This statement is correct. Off-budget loans refer to loans taken by public entities that are under the control of the central government. These loans are not directly included in the central government's budget but are considered as part of the overall debt and liabilities of the government.
Statement 2: Off-budget borrowing helps keep the country's fiscal deficit within acceptable limits.
This statement is correct. Off-budget borrowing is often used by governments to finance certain expenditures without directly affecting the fiscal deficit. By keeping certain expenditures off-budget, the government can create the impression of a lower fiscal deficit, which is an important indicator of the government's financial health.
Statement 3: Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.
This statement is incorrect. Off-budget financing does have fiscal implications as it affects the overall debt and liabilities of the government. While it may not be directly included in the calculation of certain fiscal indicators, it still contributes to the government's financial position and can impact its ability to meet its obligations.
Statement 4: Public sector banks can fund off-budget expenses.
This statement is correct. Public sector banks can provide funding for off-budget expenses. These expenses are often related to specific government initiatives or projects and are financed through loans from public sector banks. However, it is important to note that such funding should be within the regulatory framework and guidelines set by the central bank and other relevant authorities.
In conclusion, statements 1, 2, and 4 are correct while statement 3 is incorrect. Off-budget loans are loans made under the control of the central government by public entities, and they help keep the country's fiscal deficit within acceptable limits. Off-budget financing does have fiscal implications, and public sector banks can fund off-budget expenses within the regulatory framework. Therefore, the correct answer is option B.
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Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer?
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Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer?.
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ample number of questions to practice Consider the following statements regarding Off-budget borrowing.1.Off-budget loans are loans made under the control of the central government by any public entity.2.Off-budget borrowing helps keep the countrys fiscal deficit within acceptable limits.3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.4.Public sector banks can fund off-budget expenses.Which of the above statements is/are correct?a)1, 2 and 3 onlyb)1, 2 and 4 onlyc)1 and 2 onlyd)All of the aboveCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice UPSC tests.
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