ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Adverse Impact on States

A number of measures in recent years have pushed the states to raise larger and larger resources from the market. The latest is a package of recommendations of the Twelfth Finance Commission, since accepted, which includes the states substituting for central loans with mobilisation from the market. Pushing the state governments to the market on such a sizeable scale for their plan finances may in the first place prevent them from mobilising the required resources, and, secondly, whatever they do mobilise may have to be done at higher interest cost. Overall, a greater dependence on the markets for loans is going to adversely affect the states? finances.

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