In a bold move, the Centre has decided to clip the wings of truant states that blatantly borrow from the market through the special purpose vehicle (SPV) route with explicit state guarantee.
In a missive to all the states, the finance ministry has taken a strong exception to the guarantees given by states for borrowings by public sector undertakings. It has told the states that the Centre would not allow them to borrow through the SPV route if these borrowings finally make their way to the consolidated state funds.
Even if allowed to do so, the states will have to compulsorily go for credit rating of the debt offerings made by the PSUs but carrying the states
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Smart Quarterly
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app