Mumbai : The Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Friday said states with weaker finances are able to raise cheaper funds due to the market perception that state debt is sovereign-guaranteed. There was a need to bring about formal institutional fiscal discipline, he said. “State government debt is apparently implicitly guaranteed by the sovereign. So, with or without a formal guarantee the market perceives that state debt has been fully backed,” said Gokarn. Because of this, states with weak fiscal condition don’t pay much premium compared to those with strong fiscal conditions, he added. He was addressing the 14th Annual Money and Finance Conference organised by the Indira Gandhi Institute of Development Research here today……….
Read...........
No comments:
Post a Comment