States' Debt Problem: An Analysis

D Brahma Reddy and Boppana Nagarjuna ()

The IUP Journal of Public Finance, 2004, vol. II, issue 4, 60 - 69

Abstract: An attempt has been made in this paper to assess the indebtedness of the states. Two measures were adopted to assess this 1) Debt-GSDP ratio and 2) Interest payments to total revenue receipts ratio. Before going into state-wise analysis of debt position, a combined analysis of major fiscal variables is done for all the states. Going by either measure, the paper finds that the debt position of states has reached alarming levels. A scheme of debt relief is suggested for the consideration of the Twelfth Finance Commission, which will act as an incentive for states to undertake a serious fiscal reforms program due to the high quantum of debt relief.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjpf:v:02:y:2004:i:4:p:60-69

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