Archive · 17 Aug 2025
Indian States Plan to Curb Off-Budget Borrowings in FY26
Imagine states borrowing money to pay for things without it being obvious.
It's like taking a loan without telling anyone.
Lately, states have been doing this a lot.
Now, they're being told to borrow less and be more responsible with their money.
This is because too much borrowing can cause problems.
The government is helping by offering loans for important projects, but these come with rules.
This helps keep things fair and ensures there's enough money for everything.
States are realizing that keeping borrowing under control makes them look good and keeps costs down.
Indian states are expected to keep off-budget borrowings largely flat in FY26, signaling tighter fiscal discipline.
Off-budget borrowings by states rose to ₹29,335 crore in FY25 from ₹21,251 crore the year before.
States are turning to the Centre's Special Assistance to States for Capital Investment (SASCI) scheme for infrastructure projects.
The Centre has tightened rules for states, counting debt raised through state-owned entities towards borrowing limits.
Keeping off-budget borrowings in check will ease debt pressures and help ensure India's consolidation roadmap remains credible.
- Who
- Indian states and the central government.
- What
- Indian states are expected to reduce off-budget borrowings.
- When
- FY26.
- Where
- India.
- Why
- To enforce fiscal discipline and manage debt sustainably.
States Seeking Financial Flexibility
Centre's Fiscal Discipline Push
Borrowing for Welfare and Infrastructure
States Seeking Financial Flexibility
States can fund welfare schemes and infrastructure without breaching deficit targets.
Centre's Fiscal Discipline Push
High borrowings raise concerns over transparency and fiscal discipline.
- FY25 Off-Budget Borrowings
- ₹29,335 crore
- FY24 Off-Budget Borrowings
- ₹21,251 crore
- FY21 Off-Budget Borrowings
- ₹67,181 crore
- Fiscal Deficit Projection (FY26)
- 3.2% of GDP (13 major states)
- Maharashtra FY25 Off-Budget Borrowing
- ₹13,990 crore