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With farm loan waivers, states' market debt in FY18 to exceed Centre's

In recent years, while Centre has pivoted to fiscal parsimony, state govts have turned the other way

Ishan Bakshi  |  New Delhi 

If announcements of farm loan waivers by Uttar Pradesh, Maharashtra and now Punjab are anything to go by, combined state government market borrowings may well surpass those by the Centre in the current financial year. Such a situation would lead to a further widening of the spread between state development loan (SDL) yields and G-Secs, and could crowd out the private sector from the bond markets. The spread between SDLs and G-Secs is already higher than its long-term average. Over the past few years, as the central government pivoted towards fiscal parsimony, ...

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With farm loan waivers, states' market debt in FY18 to exceed Centre's

In recent years, while Centre has pivoted to fiscal parsimony, state govts have turned the other way

In recent years, while Centre has pivoted to fiscal parsimony, state govts have turned the other way If announcements of farm loan waivers by Uttar Pradesh, Maharashtra and now Punjab are anything to go by, combined state government market borrowings may well surpass those by the Centre in the current financial year. Such a situation would lead to a further widening of the spread between state development loan (SDL) yields and G-Secs, and could crowd out the private sector from the bond markets. The spread between SDLs and G-Secs is already higher than its long-term average. Over the past few years, as the central government pivoted towards fiscal parsimony, ... image
Business Standard
177 22

With farm loan waivers, states' market debt in FY18 to exceed Centre's

In recent years, while Centre has pivoted to fiscal parsimony, state govts have turned the other way

If announcements of farm loan waivers by Uttar Pradesh, Maharashtra and now Punjab are anything to go by, combined state government market borrowings may well surpass those by the Centre in the current financial year. Such a situation would lead to a further widening of the spread between state development loan (SDL) yields and G-Secs, and could crowd out the private sector from the bond markets. The spread between SDLs and G-Secs is already higher than its long-term average. Over the past few years, as the central government pivoted towards fiscal parsimony, ...

image
Business Standard
177 22