IN August this year Finance Minister Nirmala Sitharaman initiated a fresh debate when she blamed the burden of interest on oil bonds issued by the UPA government responsible for the high fuel price.
"The previous government has made our job difficult by issuing oil bonds. Even if I want to do something I am paying through my nose for the oil bonds," Sitharaman said, triggering a debate on the mounting burden of payment of interest.
According to the finance minister, the UPA government, instead of giving direct subsidy to oil companies, issued them oil bonds totalling ₹1.34 lakh crore and for the last seven fiscals, the government has been paying over $9,000 crore interest annually on these oil bonds.
Many economists did not find much merit on this argument as they said that the annual interest burden is miniscule, compared to what the government earned on excise duty collected on petrol and diesel. However, it shifted focus back on the mounting burden of interest payment on the central government, which has gone up from ₹4.27 lakh crore in 2014-15 to a whopping ₹36.93 lakh crore on the overall interest outgo in the financial year 2020-21.
This story is from the November 14, 2021 edition of The New Indian Express.
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This story is from the November 14, 2021 edition of The New Indian Express.
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