Are regulators behind the curve on state governments’ bond issuances? In the past seven years, even as the absolute fiscal deficit of the Union government has been largely unchanged, that of the state governments has increased two-and-a-half times. As a result, whereas they borrowed only about a third as much as the centre from the bond market just six years ago, in the year that just ended they borrowed 76 per cent as much. These numbers are after adjusting for the distortion introduced by UDAY, a scheme that allowed for refinancing of state distribution company debts through state government bonds:
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