Debt Sustainability of Subnational Governments in India Lessons from International Debt Crises

In 2020, for the first time in history, the world's debt as a percentage of its gross domestic product exceeded 100%. Although it has come down slightly since then, there are concerns about where the next debt crisis will happen, given that Pakistan and Sri Lanka have already found themselves in debt crises. India's overall fiscal health and macro-economic conditions remain stable, but the same may not be completely true when the discussion shifts to India's subnational entities. In Debt Sustainability of Subnational Governments in India: Lessons from International Debt Crises, Dwivedi attempts to answer this question by analysing the debt sustainability of the states in the context of many emerging issues and challenges to their fiscal health with the aim of providing usable and practical recommendations that can ensure the fiscal health of the subnational governments in India and across the world. Focusing on the state or provincial governments, Dwivedi addresses the debt that the government undertakes to fund its programmes and examines whether such governments are indulging in taking excessive debt. Some of the aspects covered in the book include international experiences with excessive borrowings or debt creation and the learnings from these experiences, trends of state government debt (subnational debt), emerging issues that pose challenges to state finances, and recommendations to control debt from spiralling out of control.

Hari Krishna Dwivedi, Chief Secretary, Government of West Bengal

Dr. Hari Krishna Dwivedi is a distinguished Indian civil servant and the current Chief Secretary of the Government of West Bengal. He has previously served in many key positions, including State Finance Secretary and Head of Taxation in the state. Dwivedi was a recipient of the Joint Japan/World Bank Graduate Scholarship Program in 2004-05, under which he pursued an M.Sc in Development Management from the London School of Economics (LSE). He also holds a PhD in Development Studies from Calcutta University. A prolific writer, his publications primarily cover topics such as community participation, women's empowerment, rural development, debt sustainability, local body finances, state finances, fiscal consolidation, and fiscal federalism. As the State Finance Secretary, Dwivedi has been instrumental in introducing wide-ranging reforms in financial restructuring and fiscal management of the state finances.

List of Tables
List of Figures
List of Abbreviations
Foreword
Preface
1. An Introduction to Public Debt
2. International Debt Crisis -- What Went Wrong?
3. Borrowings in a Decentralized Governance Structure
4. Subnational Government Borrowing in India
5. Impact of FRBM on Development Expenditure under Capital Account of SNGs
6. Debt Situation of SNGs in India: Historical Trends
7. Debt Sustainability of SNGs
8. Alternative Approach to Measure SNGs' Debt Sustainability
9. Emerging Issues in Debt Sustainability of SNGs in India
10. How SNGs in India Can Avoid Debt Crisis
11. Strengthening Finances of Local Bodies -- Drivers of Growth
12. Conclusion
References
Index
Appendix