Experts hope Budget 2020 will come clean on Modi government's borrowings   

HYDERABAD: When she presents her second budget next Saturday, policy wonks expect Finance Minister Nirmala Sitharaman to make a clean breast of all government borrowings. This includes off-budget financing, which is nothing but debt taken by public sector enterprises (PSEs) such as the Food Corporation of India (FCI) to bridge the subsidy gap. Excluding state borrowings and off-budget transactions, fiscal deficit for FY20 was projected at 3.4 per cent during the previous budget, but given the weak revenue collections, the target is unlikely to be met. Moreover, markets expect the government to relax the deficit targets and present a fresh medium-term fiscal consolidation plan altogether. “The most important announcement in the budget could be to make the event relevant by inducting public sector borrowing requirement (PSBR) along with the central government’s deficit/borrowing data. It’s essential to inform the nation that PSBR is almost double of the reported deficit of 3.5 per cent of GDP, which has put serious stress on domestic financial markets,” Nikhil Gupta, analyst, Motilal Oswal noted. In the absence of all debt disclosures, some presume there’s sufficient fiscal room to offer stimulus, while others believe there’s not much headroom. For context, it even highlighted how subsidy arrears for FCI shot up a staggering 350 per cent in the five years preceding FY17. The government maintains that it discloses all off-budget transactions in budget statements, including details of ministry-wise internal and extra-budgetary resources of the public enterprises. The next logical step is to start counting this as part of the broad fiscal deficit indicator.