Sustainable Debt Policies of Indian State Governments

P.S. Renjith and K.R. Shanmugam
Additional contact information
P.S. Renjith: P.S. Renjith (corresponding author) is ICSSR Research Fellow, Madras School of Economics, Chennai, Tamil Nadu, India, e-mail: renjith@mse.ac.in

Margin: The Journal of Applied Economic Research, 2018, vol. 12, issue 2, 224-243

Abstract: This study analyses the public debt sustainability issue of 20 major Indian states using the Bohn framework for panel data from 2005–2006 to 2014–2015. It employs regular panel data estimation procedures and the penalized spline (p-spline) technique. The results indicate that the primary balance of state governments responds positively to high public debt, so debt policies are successful in sustaining the debt situation of Indian states as a whole. However, at the individual level, debt is sustainable only in 12 states; in 8 states, debt is unsustainable and so these states require corrective action. These findings may be useful to policymakers and other stakeholders to formulate appropriate strategies to improve the debt situation of Indian states. JEL Classification: E62, H63, H72, H740

Keywords: Primary Balance; Sustainable Debt; Indian States; Bohn Framework (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0973801017753283 (text/html)

Related works:
Working Paper: Sustainable Debt Policies of Indian State Governments (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:12:y:2018:i:2:p:224-243

DOI: 10.1177/0973801017753283

Access Statistics for this article

More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research
Bibliographic data for series maintained by SAGE Publications ().