Abstract
Abstract
This chapter looks at the various emerging issues that are relevant in a discussion on debt sustainability of the subnational governments (SNGs) in India. These include the end of GST compensation from June 2022, the rising contingent liabilities of the SNGs that account for almost 24 per cent of GDP, the large losses that still plague the state DISCOMs, the rising inefficient subsidies which have seen double-digit growth in 2019–20 and 2020–21, the poor fiscal performance of the state-level public enterprises, the high inflation and associated high bond yield, and most importantly the decline in share of tax devolution. Over the years, the percentage of central GTR devolved to states has declined from 35% in 2015–16 to 30% in 2020–21. All these challenges if not addressed in a timely manner, may further worsen the already debt-stressed situation of SNGs.
Publisher
Oxford University PressOxford
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