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* Finance minister to present annual budget on Feb.1
By Manoj Kumar and Aftab Ahmed
NEW DELHI, Jan 23 (Reuters) - India is likely to fundroughly $28 billion of its expenditure outlay in its upcomingbudget for the fiscal year 2020/21 via off-budget borrowings,said three government sources directly aware of the matter, asit seeks to revive a sagging economy, while keeping its fiscaldeficit in check.
Prime Minister Narendra Modi's government is under pressureto increase spending on rural welfare schemes and infrastructureto boost economic growth that has fallen for six straightquarters.
Off-budget borrowings are a means by which the governmentkeeps its fiscal deficit in check by making quasi-governmententities borrow on its behalf, to partly fund its expenditureplan for the year.
This would mark a roughly 13.8% increase in so-calledoff-budget borrowings from an estimated 1.75 trillion rupees($24.6 billion) in the ongoing fiscal year, said the threesources, who asked not to be named as the discussions areprivate.
"We're facing a serious economic crisis," said one of thesources, adding there was no alternative but to raise spendingon infrastructure and welfare schemes to boost consumer demandand create jobs.
"You should not be surprised if the real deficit touches4.5% of GDP," he said, adding the 'official' deficit could bekept between 3.5% and 4% of GDP.
"After initial denial of the economic slowdown," he said thegovernment has realised it needs to take all possible steps tosupport economic growth.
A spokesman for the finance ministry declined to comment,citing the silent period ahead of the budget speech on Feb. 1.
(Reporting by Manoj Kumar; Editing by Euan Rocha and ChizuNomiyama) ((manoj.kumar@thomsonreuters.com; +91 11 4954 8029; ReutersMessaging: manoj.kumar.thomsonreuters.com@reuters.net))
