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Concern over growing government borrowings


‘Budget deficit that is expected to reach 10.5 per cent of the GDP is of a high order’


HYDERABAD: Speakers expressed concern over the large government borrowings while stressing the need for efficient public expenditure, at a post-budget discussion organised by the Federation of AP Chambers of Commerce and Industry (FAPCCI) here on Wednesday.

S.K. Rao, Director-General, Administrative Staff College of India (ASCI), said the budget deficit (expected to reach 10.5 per cent of the GDP) was of a high order.

He feared the interest rates might go up because of the large demand of borrowings.

Disinvestment

While welcoming government disinvestment in public sector units, he said ‘outcomes-oriented budgeting’ was not receiving enough attention.

Also, there was a need to simplify tax system and improve infrastructure financing.

V.K. Srinivasan, Vice-Chairman, Indian Institute of Economics, said he was concerned not only about borrowings, but also the manner in which the money would be utilised.

There were areas like vocational education where more funds were needed, instead of expending the money on “give-away schemes,” which would not add to productive economy.

He described the budget as a measured response of a matured financial administrator, who opted for circumspection.

Situation alarming

J. Manohar Rao of University of Hyderabad, said more emphasis should have been given to infrastructure and construction sector.

The current fiscal deficit was expected to reach 10.8 per cent if the figures of State governments were included, he stated, describing the situation as “alarming”. The industry was not encouraged to the desired extent in developing public-private partnership in certain areas.

There was no concerted effort to increase investment in rural development.

K. Harischandra Prasad, FAPCCI president, welcomed.

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