Centre Cautious On States Debt Retirement

The finance ministry is likely to exercise caution in letting states retire their high-cost debt. Large-scale market borrowings by states, the ministry fears, may lead to hardening of interest rates besides sucking liquidity from the market. The total outstanding debt of all states on March 31, 2002 was over Rs 200,000 crore.

According to officials, while finance minister Jaswant Singh has promised a viable solution to the states