States raise record ₹50,206 cr. in debt, push up bond yields
States raise record ₹50,206 cr. in debt, push up bond yields
Current Affairs Daily Articles & Editorials
La Excellence IAS Academy | March 20, 2024
| Syllabus: GS-III, Subject: Economy Topic: Fiscal policy and Budgeting, Issue: Borrowings by states |
Context: India’s direct tax collections have exceeded 97% of the revised target for 2023-24.
- Total borrowings for the fiscal year are expected to be lower than projected.
Impact:
- Increased borrowing by states led to liquidity pressures, causing bond yields to rise.
- A bond yield is the return an investor expects to receive on a bond investment each year, expressed as a percentage
- The gap between central and State government bond yields widened.
- Rising bond yields are expected to increase borrowing costs for both central and State governments.
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