Indiscriminate borrowing, non-merit expenditure by states to harm fiscal health: FM Nirmala Sitharaman
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Union Finance Minister Nirmala Sitharaman has said indiscriminate borrowing and spending by certain States on non-merit goods and expenditure is a matter of concern, and fiscal strength is a critical component for 'Atma Nirbhar Bharat'. Sitharaman stated that the temptation to borrow beyond capacity would create an inter-generational burden and affect the fiscal soundness of the country.
She stated that the tendency to get into such not-so-viable, non-merit expenditure is very high in some States. Moreover she mentioned, as per the Constitution, the Centre can discuss with and raise questions to the States on borrowing but many of them see it as an interference in their space of authority.
Further, she said the economy in the globalised world must address the vulnerabilities it faces and the Centre and the States would have to work together in that regard. Besides, she added that despite hurdles and challenges, the country surged ahead in areas of development and even reached the fifth position in the global economy index overtaking the United Kingdom.
