Tamil Nadu, India's 2nd-most industrialised state, in favour of debt recast

The states' inflated debt sale schedule alludes to that possibility. They are scheduled to borrow as much as Rs 1.78 trillion ($25 billion) from the market in the April-June quarter

Tamil Nadu, India’s second largest state by output, is favoring a debt recast to ease its financial burden at a time when the pandemic is forcing states to borrow even more to fund widening budget deficits.

“We need a one-time restructuring of our debt because the interest burden has become so high,” Palanivel Thiaga Rajan said in an interview to Bloomberg TV Friday. “My concern is about fixing the structural problem so that we don’t have this vicious cycle.”

The maturity profile of states’ debt suggest that redemption pressure is likely to double from 2026 onwards, the Reserve Bank of India said