Union Finance Minister Nirmala Sitharaman emphasized on Thursday that state governments must channel their borrowed funds into long-term capital expenditure, such as schools and hospitals, rather than relying heavily on revenue expenditure like cash distributions when financial resources are tight. Addressing the media, Sitharaman stated that borrowing is not the issue, but what you do with the borrowed money matters - whether it creates assets, brings education, industries, or increases employment. She noted that states are permitted to borrow up to three per cent of their Gross State Domestic Product (GSDP). As per Business Standard, Sitharaman underscored that taking loans to create public infrastructure yields a positive economic impact and generates employment for the next 50 to 60 years.
Sitharaman underscored that taking loans to create public infrastructure yields a positive economic impact and generates employment for the next 50 to 60 years. As reported by Business Standard, she emphasized that the focus should be on creating assets that bring long-term benefits to the state. The Finance Minister's comments come during her two-day visit to Tamil Nadu and Puducherry, where she attended the Maha Kumbabhishekam of Sri Upanishad Brahmendra Mutt in Kancheepuram.
During her visit, Sitharaman is scheduled to travel to Puducherry to inaugurate a renovated colonial-era lighthouse at the Central Goods and Services Tax (CGST) Commissionerate campus. According to Business Standard, her heritage conservation itinerary also includes the inauguration of the restored 400-year-old Muzhiankulam at a government middle school in Puducherry on Friday. The Finance Minister also addressed the absence of a medical college in Kancheepuram, clarifying that the Centre had already announced a policy three budgets ago to support the establishment of a medical college and hospital in every district.
Commenting on the delayed development of Andhra Pradesh's capital, Amaravati, Sitharaman pointed out that political shifts had stalled progress. As reported by Business Standard, she noted that while the capital was being built continuously between 2014 and 2019, a subsequent change in the state government halted the project until 2024. The Finance Minister urged the Tamil Nadu government to submit a proposal for establishing a medical college, stating that the Centre has provided policy support for such initiatives in every district. "We have told the states to plan for whichever district they want. The Tamil Nadu government should understand this and plan accordingly," she added.
