Q. Consider the following statements regarding “Off-Budget Borrowings (OBB)”:
1.They refer to borrowings that are reflected in the budget.
2.They are taken not by the government directly but by another public institution on its direction.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation: Off-Budget Borrowings (OBBs) refer to borrowings that are not reflected in the budget, even though budgetary resources will have to be used for their repayment.
- Thus, OBB is not part of the calculation of the fiscal indicators despite fiscal implications.
- OBBs are taken not by government directly but by another public institution on its direction.
- For example, loan by FCI for paying food subsidy bill (this practice is discontinued from FY 2020-21).
Source: FORUMIAS
