Govt using almost entire borrowings in FY'26 towards capex: FM Nirmala Sitharaman in LS
New Delhi, Feb 11 (PTI): The government is using almost the entire borrowing in 2025-26 towards financing capital expenditure, Finance Minister Nirmala Sitharaman said on Tuesday.
She said the effective capital expenditure in FY'26 is Rs 15.48 lakh crore, which is 4.3 per cent of GDP.
The fiscal deficit target is 4.4 per cent of the GDP for next fiscal.
"It indicates that the government is using almost the entire borrowed resources for financing effective capital expenditure. So the borrowings are not going for revenue expenditure or committed expenditure, or any of those kinds.
“It's going only for creating capital assets. So, in effect, the government intends to use about 99 per cent of borrowed sources to finance effective capital expenditure in the upcoming year," she said in the Lok Sabha.
Replying to a discussion on General Budget 2025-26, Sitharaman said the Budget has come in a time of immense uncertainties, changes in the global macro-economic environment, stagnating global growth and sticky inflation.
The world's scenario in the last 10 years turned 180 degrees, and making Budget is more challenging now than ever before, she said, adding Budget balances national development necessities with fiscal priorities:
Sitharaman said inflation trend, particularly food, appears to be moderating.
"Inflation management receives the highest priority of this government. Overall, retail inflation is within the notified tolerance band of 2-6 per cent," Sitharaman said.
On the weakening of rupee against US dollar, the minister said various global and domestic factors are influencing the value of rupee against the US dollar.
The Indian rupee has depreciated 3.3 per cent against the US dollar between October 2024 and January 2025, but the decline has been lower than that in some of its Asian peers.
South Korean Won and Indonesian Rupiah depreciated by 8.1 per cent and 6.9 per cent, respectively in this period.
Further, all G-10 currencies also depreciated during this period by more than 6 per cent with Euro and British Pound depreciating by 6.7 per cent and 7.2 per cent, respectively.
Sitharaman also said there has been no cut in transfer to states and Rs 25.01 lakh crore will be transferred in FY'26.
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Karnataka to approach SC seeking permission to continue MGNREGA
Bengaluru (PTI): The Karnataka Cabinet on Thursday decided to approach the Supreme Court seeking permission to continue implementation of MGNREGA in the state, contending that the Centre had repealed the rural employment guarantee law without consultation and failed to put in place any alternative mechanism under the VB-G RAM G Act.
Briefing reporters after the Cabinet meeting, Karnataka Law and Parliamentary Affairs Minister H K Patil said the state would immediately move the apex court seeking permission to prepare and implement the annual action plan for rural employment works, while also challenging what it described as an infringement on the constitutional rights of states.
The parliament passed VB-G RAM G in December that replaces MGNREGA.
Patil explained that the Cabinet decided to approach the court seeking permission for the State Government to prepare an action plan in this regard. Since the Centre’s stand interferes with the constitutional rights of state governments, the Cabinet has also decided to challenge this issue before the appropriate court
“There are two points here. One is that they have come in the way of our constitutional right of providing the right to work. That has been halted, and, therefore, the State Government has decided to approach the Supreme Court. The second point is that the Government of India has not provided any alternative,” the Minister said.
The Central Government has not yet issued a notification to implement the VB-G RAM G Act, nor has it made any alternative arrangements and hence continuing Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is unavoidable in the public interest, the Minister said.
“Therefore, in the interest of the public, farmers and agricultural labourers, we must continue MGNREGA. For that purpose, the Cabinet has decided to approach the court seeking permission for the State Government to prepare the action plan for this year,” he added.
The Minister also said the Centre had only permitted continuation of pending and spillover MGNREGA works without releasing grants or announcing a fresh action plan.
“The Centre itself has said that pending, spillover and half-done MGNREGA works can continue. That means MGNREGA is actually still functioning in practice. But there is no new action plan,” he said.
Patil said the state had already passed a resolution on the issue, while Chief Minister Siddaramaiah had written to the Prime Minister and the Rural Development Minister had held discussions with Union Ministers.
Replying to questions, the minister said the state would move court “as immediately as possible.”
He clarified that the state was seeking permission to formulate and implement this year’s action plan under the existing framework.
“What we are asking the Supreme Court is to allow us to have the action plan for this year and implement it,” he said.
The Cabinet also held detailed discussions on the final report submitted by the State Education Policy Commission headed by former UGC chairman Professor Sukhadeo Thorat.
Patil said a Cabinet sub-committee would be constituted to examine the report and recommend measures for implementation.
“No decision has been taken yet. The Cabinet sub-committee will recommend what should be accepted and what should be modified,” he said.
He said the report comprised around eight volumes and covered issues relating to financial implications, human resources, curriculum reforms, deemed universities, unitary universities and newly established universities. The Chief Minister has been authorised to constitute the sub-committee.
The Cabinet also approved the Karnataka Motor Transport and Other Related Workers’ Social Security and Welfare Amendment Bill, 2026, transferring welfare administration of transport-related workers from the Labour Department to the Transport Department.
The Cabinet further approved establishment of three new industrial estates in Kalaburagi, Yadgir and Surpur under the Karnataka State Small Industries Development Corporation and Kalyana Karnataka Region Development Board schemes at an estimated cost of Rs 200 crore.
The Cabinet also approved amendments to Karnataka Civil Services (General Recruitment) Rules, 2026, providing two per cent reservation in state civil services appointments for sportspersons.
