Off-budget state borrowing: India must treat the illness rather than the symptom
The exception, 2007-08 (2.5%), was itself an off-budget artefact: oil and fertilizer bonds worth about ₹47,757 crore, roughly 1% of GDP, were issued in lieu of cash subsidies. Food subsidy arrears were long parked with the Food Corporation of India. The Act was amended thrice, the Union got a glide path, and from 2026-27, it has effectively moved to a debt anchor of 50% of GDP (with permissible variation of 1% on either side) by 2030-31.
