One of the most controversial features of the Modi government's latest budget is the announcement that it would borrow in foreign currencies, such as U.S. dollar or Japanese yen, as well as the Indian rupee.
In the past, the government has pushed state-owned enterprises to take foreign currency loans to deal with balance of payment issues or for other reasons. But it has not taken any foreign debt on its own books, the only exception being borrowings from multilateral institutions such as the IMF and the World Bank. This budget, then, represents a clear structural shift in the policy.
