India Seeks to Roll Back States’ Ability to Borrow More
- States pushing for higher borrowings on slowdown concerns
- Modi government wants to cut budget gap amid global scrutiny
Narendra Modi
Photographer: T. Narayan/BloombergThis article is for subscribers only.
India may deny any leeway to states wanting more headroom to borrow as Prime Minister Narendra Modi’s administration aims to tighten fiscal policy in a bid to assuage global investors, according to people familiar with the matter.
States’ borrowing, including those to undertake power sector reforms, is likely to be capped at 3.5% of their gross domestic product for the fiscal year starting April 1. That is lower than the 4% cap for the current year, said the people who asked not to be named. Finance ministry spokesman didn’t answer to calls to his mobile phone seeking comment.