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Sustainability and Threshold Value of Public Debt in Tamil Nadu

Vol. 58, Issue No. 14, 08 Apr, 2023
K R Shanmugam, K Shanmugam

The sustainability and the threshold level of public debt in Tamil Nadu is examined using the modern time series methods and threshold regression method. The results suggest that the current level of debt in the state is unsustainable, and the debt sustainability threshold is about 18.5%, which is slightly lower than the 20% norm set by the Fiscal Responsibility and Budget Management review committee for states. The state should control its debt as it is currently not growth-inducing. The simulation exercise based on the debt dynamics of the state suggests that the state economy should grow at 14% and fiscal deficit target should be 2% from 2023–24 onwards to attain the debt sustainability target in 2035–36 and with 16% growth the state could reach the target in 2030–31. The relevant policy strategy for the state is to increase its own revenue–GSDP ratio by 0.75% and contain its revenue expenditures by 0.75% from 2023–24.

Monetary Fiscal Coordination and the Evolution of Public Debt

Vol. 57, Issue No. 22, 28 May, 2022
Advait Moharir

Using an accounting framework, this article simulates the evolution of the debt ratio based on four policy interventions. It recommends pursuing an expansionary monetary policy combined with an equally active and complementary fi scal policy. The article also says that monetary policy should target the debt ratio, while fi scal policy should target output.

Utilisation of Government Borrowings in Major Indian States

Vol. 56, Issue No. 37, 11 Sep, 2021
Amanpreet Kaur

Fiscal sustainability is a key element for subnational governments in India as fiscal policy is the only instrument that can be used to correct economic malady. As far as state government finances are concerned, subnational financial stability can be understood as the capacity to generate adequate resources to afford their expenses on a sustained basis. An analysis of subnational fiscal sustainability, through a study of utilisation patterns of total debt receipts of state governments, is undertaken for 17 major Indian states during 1980–81 to 2014–15. The results indicate wide fluctuations among the states. While Kerala, Punjab, and West Bengal have shown poor and unproductive utilisation of debt receipts, Punjab has witnessed maximum instability.

 

Dismal Balance Sheet

Vol. 37, Issue No. 05, 02 Feb, 2002

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Fiscal Policy Rules for India?

Vol. 36, Issue No. 09, 03 Mar, 2001
George Kopits

This paper assesses the potential usefulness of fiscal policy rules for India, in the light of rapidly growing international experience in this area. As part of this assessment, it explores various design options and institutional arrangements that seem relevant for India, in the context of the Fiscal Responsibility and Budget Management Bill. To conclude, the paper outlines preparatory steps for successful implementatio

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