As the government is increasingly using off-budget financing for both revenue and capital funding, former governor of Reserve Bank of India (RBI), C Rangarajan, on Wednesday said the interim budget must show funding plan for schemes and financing new schemes out of deficit is unwise.

According to data released by the Comptroller and Auditor General (CAG), fiscal deficit in the April-November period stood at Rs 7.17 trillion ($101.93 billion), or 114.8 percent of the budgeted target for the fiscal year that ends in March.

"In a sense, a convention has developed over time of limiting the budget to simple statement of account on revenues and expenditure. If any large expenditure measure is introduced, then a corresponding taxation or corresponding revenue adjustment is also to be made and that is certainly not warranted, when the elections are due and the new government is expected to be sworn in shortly thereafter," Rangarajan said.

Former RBI governor said the last interim budget in 2014 talked about 'One Rank One Pay' and left a token allocation.

Expecting some announcement from the government, he said the interim budget won't see any large expenditure from centre.

"Therefore, in my view this convention is a good convention and perhaps the interim budget should confine itself only to the statement of account. However, if they so desire, they can make announcement regarding what they have in mind and what can be done," he added.