Managing State Debt and Ensuring Solvency : The Indian Experience

The paper presents the policymakers perspective on the reforms undertaken to manage states debt and ensure solvency. While the sustained high growth rates of the Indian economy played a part in alleviating the interest burden on debt and ensuring that the debt does not grow in an explosive trajectory, major reforms were implemented to reverse the fiscal decline, develop fiscal responsibility rules to ensure sustained adjustment, and move toward a market-based financing of state deficits. The serious efforts at fiscal consolidation and institutional reforms have enabled states to set on the path toward fiscal correction. Nonetheless, weak global growth prospects and the risk of a further rise in global commodity and fuel prices could generate the dilemma of needing to compress expenditures for ensuring fiscal sustainability while simultaneously needing counter-cyclical spending to boost growth, and challenge the fiscal adjustment process.

Bibliographic Details

Main Authors:	Rangarajan, C., Prasad, Abha
Language:	English
Published:	World Bank, Washington, DC 2012-04
Subjects:	ACCESS TO RESOURCES, ACCOUNTING, ACCOUNTING POLICIES, ACCUMULATION OF DEBT, ACTIVE DEBT, AMORTIZATION, ARREARS, BAILOUTS, BANK DEPOSIT, BANK POLICY, BANK RATE, BANKING SECTOR, BASIS POINTS, BORROWING REQUIREMENTS, BUDGET CONSTRAINTS, BUDGET MANAGEMENT, CAPITAL EXPENDITURES, CASH MANAGEMENT, CENTRAL TRANSFERS, CLEARING CORPORATION, COMMERCIAL BANKS, CONTINGENT LIABILITIES, CONTINGENT LIABILITY, COUNTRY COMPARISONS, CREDIBILITY, CREDIT FACILITY, CREDIT RATING AGENCIES, CREDIT RATINGS, CREDIT RISK, CREDIT STRENGTH, CREDITOR, CURRENCY, CURRENT ACCOUNT, CURRENT EXPENDITURES, DEBT, DEBT ACCUMULATION, DEBT BURDEN, DEBT COMPOSITION, DEBT CONSOLIDATION, DEBT FINANCE, DEBT FORGIVENESS, DEBT LEVEL, DEBT LEVELS, DEBT MANAGEMENT, DEBT OBLIGATIONS, DEBT RELIEF, DEBT REPAYMENT, DEBT RESTRUCTURING, DEBT SERVICE, DEBT SERVICE PAYMENTS, DEBT SWAP, DEBTS, DECENTRALIZATION, DEFAULT RISK, DEFAULTS, DEFICIT FINANCING, DEFICITS, DEMAND DEPOSITS, DEMAND FOR CREDIT, DEPOSIT, DEPOSIT INTEREST, DEPOSITS, DEVELOPMENT BANKS, DEVOLUTION, DISCLOSURE NORMS, DOMESTIC BORROWINGS, DOMESTIC CREDIT, DOMESTIC CREDIT RATING, ECONOMIC ACTIVITY, ECONOMIC GROWTH, ECONOMIC POLICY, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURE, EXPENDITURES, EXTERNAL BORROWING, EXTERNAL DEBT, EXTERNAL SHOCKS, FINANCES, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARY, FINANCIAL MANAGEMENT, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL SECTOR LIBERALIZATION, FINANCING NEEDS, FINANCING REQUIREMENTS, FISCAL AUTONOMY, FISCAL CAPACITY, FISCAL CONDITIONS, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL DISCIPLINE, FISCAL LEGISLATION, FISCAL POLICIES, FISCAL POLICY, FISCAL REFORM, FISCAL REFORMS, GOVERNMENT BONDS, GOVERNMENT BORROWING, GOVERNMENT BUDGET, GOVERNMENT DEBT, GOVERNMENT DEFICIT, GOVERNMENT EXPENDITURE, GOVERNMENT FINANCE, GOVERNMENT FINANCES, GOVERNMENT GUARANTEE, GOVERNMENT GUARANTEES, GOVERNMENT SECURITIES, GOVERNMENT SPENDING, GRACE PERIOD, GREATER ACCESS, GROSS DOMESTIC PRODUCT, HOUSEHOLD SAVINGS, IMPLICIT SOVEREIGN GUARANTEE, INDEBTEDNESS, INFLATION, INSTITUTIONAL REFORM, INSTITUTIONAL REFORMS, INTEREST BURDEN, INTEREST COSTS, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATES, INTERNATIONAL BANK, ISSUANCE, ISSUANCE OF GUARANTEES, KEY CHALLENGE, LAWS, LENDING POLICY, LIABILITY, LIQUIDITY, LIQUIDITY MANAGEMENT, LOAN, LOAN GUARANTEES, LOAN PROCEEDS, LOANS FROM BANKS, LOCAL GOVERNMENT, LOCAL GOVERNMENTS, MACROECONOMIC MANAGEMENT, MACROECONOMIC POLICIES, MACROECONOMIC STABILIZATION, MARKET ACCESS, MARKET BORROWING, MARKET BORROWINGS, MARKET CONDITIONS, MARKET DEVELOPMENTS, MARKET DISCIPLINE, MARKET INTEREST RATE, MARKET INTEREST RATES, MARKET PARTICIPANTS, MATURITIES, MATURITY, MONETARY FUND, MONETARY POLICY, MORAL HAZARD, MULTILATERAL DEVELOPMENT BANKS, MUNICIPAL BOND, MUNICIPAL BOND MARKET, NEW MARKET, OUTSTANDING DEBT, OVERDRAFT, OVERDRAFT FACILITY, OVERDRAFTS, PAYMENT DEFAULTS, PENSION, PENSIONS, POLITICAL ECONOMY, PORTFOLIO, PORTFOLIOS, PRIVATIZATION, PUBLIC DEBT, PUBLIC ENTERPRISES, PUBLIC FINANCE, PUBLIC INVESTMENTS, RATES OF INTEREST, RECEIPT, RECEIPTS, REDEMPTION, REPAYMENT DISCIPLINE, REPAYMENTS, REPO, REPO RATE, RESERVE, RESERVE BANK, RESERVE BANK OF INDIA, RESERVES, RESOURCE MOBILIZATION, RETIREMENT, RETURNS, REVENUE SHARING, RISK MANAGEMENT, RISK PREMIUMS, RURAL ACCESS, SAVINGS BANK, SAVINGS RATE, SAVINGS SCHEMES, SELF-REGULATION, SETTLEMENT, SHORT-TERM BORROWING, SINKING FUND, SOCIAL SECURITY, SOLVENCY, STATUTORY LIQUIDITY, STATUTORY REQUIREMENTS, STRUCTURAL ADJUSTMENT, STRUCTURAL DEFICITS, SUBNATIONAL DEFICITS, SUBNATIONAL FINANCES, SUBNATIONAL GOVERNMENTS, SUPPLY OF CREDIT, TAX, TAX COMPLIANCE, TAX EXEMPT, TAX RATE, TAX RATES, TAXATION, TERM CREDIT, TERM DEPOSITS, TOTAL DEBT, TRANSPARENCY, TREASURY, TREASURY BILLS, TURNOVER, UNION, WAGES, YIELD SPREADS,
Online Access:	http://documents.worldbank.org/curated/en/2012/04/16231495/managing-state-debt-ensuring-solvency-indian-experience https://hdl.handle.net/10986/6041
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