ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

BorrowingSubscribe to Borrowing

Should States Target a 3% Fiscal Deficit?

India’s current fiscal rules target a 3% fiscal deficit for the central and state governments. Though states have largely adhered to their borrowing ceilings, subnational debt is proliferating. A significant reduction in subnational borrowing is required to stabilise the states’ debt around the desired level of 20% of gross domestic product. Symmetry should not be forced on central and state borrowing flows, given their widely divergent levels of debt stocks.

Not in People's Interest

The politics and economics of interest rate formation in this country must be studied carefully. Lowering the interest rate raises stock prices in an environment where they themselves cannot move up thanks to the fundamentals of the economy that are not conducive.

Cost of Credit of Commercial Banks in a Deregulated Environment

This study analyses the cost of credit of commercial banks in a deregulated environment on the basis of BSR data in respect of large borrowal accounts. As subsidisation of interest rates either with reference to priority sectors or size of loans has virtually vanished, there is imperative need to evolve a suitable information system in respect of small borrowal accounts on a par with that for large accounts, preferably through repetitive sample surveys.
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