The state of states: Have they really been fiscally profligate?

A couple of states may be guilty of fiscal imprudence. But why tar all of them with the same brush?

The state of states

Illustration: Binay Sinha

A K Bhattacharya
Concerns have been expressed over some states seeking recourse to excessive borrowing, which no doubt is fiscally imprudent and irresponsible. But how serious are these concerns? And are some states indeed borrowing excessively and living beyond their means?
Data on the debt position of states will tell you a slightly different story. According to a study by the National Institute of Public Finance and Policy, aggregate public debt of 18 major states did go up from 20.53 per cent of gross state domestic product (GSDP) in 2019-20, a pre-Covid year, to 23.5 per cent of GSDP in 2020-21. However,
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Nov 08 2022 | 9:50 PM IST

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