New Delhi [India], February 3 : India is using its market borrowings for Capital Expediture and its Budget is non-inflationary, said Tuhin Kanta Pandey, Finance and Revenue Secretary on Monday.
"We are borrowing to build capex," Pandey told a post-Budget industry conference organised by FICCI, stressing that it was a non-inflationary budget.
As announced in the Union budget on February 1, the government plans to borrow Rs 15.4 lakh crore from the market
"Which year you have this situation, your entire borrowing is going into capex. Normally, a lot of your borrowings go into your revenue expenditure. We are borrowing to build capex," Pandey told industry leaders.
He asserted that his explanation stemmed from reports, which stated that the government didn't allocate enough for capital expenditure.
The finance and revenue secretary clarified that a grant of Rs 4 lakh crore is being given to states on top of the budgeted capex of Rs 11.21 lakh crore for 2025-26.
"There is another Rs 4 lakh crore which is going as a grant to the states to spend. As because that is not our asset, so I can't show in accounting terms in our capex," he explained.
He cited the example of many schemes, including mega Jal Jeevan Mission, which are underway across the country. He added that a bulk of the money for such schemes also come from the Centre.
"So that money is also capex, you know, we're showing it as a grant," Pandey stressed. "So in the budget itself, we have given that number. So let's not talk about Rs 11.21 lakh crore (capex). That's a direct central capex."
Further, the secretary also alluded that the government has not kept numbers off-budget.
"We are trying to say that the numbers are credible and everyone recognises today that, you know, when we show the numbers, there is no numbers hidden elsewhere on expenditure in others," he said.
Finance Minister Nirmala Sitharaman has allocated Rs 11.21 lakh crore for capital expenditure in the Union budget for 2025-26.
A capital expenditure, or capex, is used to set up long-term physical or fixed assets.
The finance Secretary also stressed government's fiscal consolidation path
"We were to bring it to 4.9 per cent and we delivered 4.8 per cent. We said at the time we will have next year 4.5 fiscal deficit, we're doing 4.4 per cent (2025-26 estimate," Pandey said.
Presenting the Union Budget, Finance Minister Nirmala Sitharaman on Saturday pegged the fiscal deficit target at 4.4 per cent of GDP for the financial year 2025-26.
For 2024-25, the fiscal deficit was revised from 4.9 per cent of gross domestic product (GDP) to 4.8 per cent.
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