The burden of interest on the government’s borrowings is estimated to grow at 17 per cent this fiscal. The Finance Ministry estimates that the Centre’s expenditure on interest payments will grow 17 per cent to Rs. 3,64,244 crore in 2013-14, according to the economic and functional classification of the Union Budget released here on Wednesday. This is even greater than the UPA government’s subsidy bill for the year, estimated at Rs. 2,42,255 crore. “A rate of growth of interest payments that is faster than the rate of growth of the economy is not a good trend,” a highly placed Ministry source told The Hindu. Interest payments are growing five percentage points faster than GDP growth. The Central Statistical Office estimates the growth of GDP for the year at current prices will be 12.3 per cent.
Consumption expenditure, mainly salaries, will grow at 17 per cent in 2013-14 to Rs. 3,15,318 crore as against 12 per cent the previous year.
This article has been corrected for an error