Indian states need more financial support from the government: S&P

Indian states’ weaknesses outweigh their strengths as they battle the Coronavirus (Covid-19) pandemic and they need financial support from the federal government, which is already dealing with drastically reduced revenue, according to S&P Global Ratings.
 

The Covid-19 pandemic could increase budget deficits and indebtedness of state governments as spending needs to exceed revenue collected, S&P Global analysts YeeFarn Phua and Ruchika Malhotra said in a report. The federal government and the Reserve Bank of India will remain key pillars for states’ fiscal framework and performance, they said.

Strengths

• Established record of extraordinary support from the central government and the