Finding investors for State debt
Financial Express As States issue more debt, finding the investors who will subscribe to the issue will require expanding the current pool of investors and making the investment more lucrative While there have been many deliberations in these pages on the growing amount of debt that the various tiers of the government (Centre and States) will have to raise, little discussion has gone into who they will raise the funds from. It is left to the all-encompassing term: ‘market borrowing’. We deep-dive to see who constitutes this market and what policy implications arise. Every September, the Reserve Bank of India (RBI) releases a treasure trove of data: Handbook of Statistics on the Indian Economy. While there are many aspects of interest in this data release, we will specifically focus on tables 113 and 114. The former details the “Combined Liabilities of Central and State Governments” and the latter, “Ownership of Central and State Government Securities”. These annual data releases o...