Union Finance Minister says State borrowing justified if spent on capex
Union Finance Minister Nirmala Sitharaman stated that state borrowing is acceptable provided the funds are directed toward long-term capital expenditure like education and infrastructure. She emphasized that states should prioritize asset creation over revenue expenditure to ensure sustainable growth.
Why it matters
This policy guidance sets the fiscal framework for state-level economic management and development in India.
Union Finance Minister Nirmala Sitharaman said State governments must channel their borrowed funds into long-term capital expenditure such as schools and hospitals rather than relying heavily on revenue expenditure such as cash distributions, particularly when financial resources are constrained.
The article reports on government policy and ministerial statements without overt editorializing.
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