State borrowings must focus on asset creation, not just revenue expenditure: FM Nirmala Sitharaman
Union Minister Nirmala Sitharaman graces the unveiling ceremony of the new book, titled ‘Daughters of Kanchi – The SSKV Story’, on the 120th anniversary of the SSKV Group at SSKV College of Arts & Science for Women in Kilambi, Kanchipuram, on Thursday (June 25, 2026). Photo Credit: X@nsitharamanoffc Union Finance Minister Nirmala Sitharaman on Thursday (June 25, 2026) emphasised 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, Ms. Sitharaman underscored that taking loans to create public infrastructure yields a positive economic impact and generates employment for the next 50 to 60 years. “Borrowing is not the issue, but what you do with the borrowed money matters. Are you creating assets? Is it bringing education, industries, or increasing employment? That should be the focus,” she said, noting that states are permitted to borrow up to 3% of their Gross State Domestic Product (GSDP). Ms. Sitharaman, who is on a …
