States go slow on projects, halve borrowing even as Covid wreaks havoc

The reason could lie in RBI's accommodation to them and the fact that states themselves could be burdened with interest cost

States are going slow on fundraising from the market at a time when the second wave of the Covid-19 pandemic has turned out to be far more disastrous than the first wave. Ratings agency Care Ratings has said the aggregate state government borrowing so far this fiscal year has been 54 per cent less than the corresponding borrowings last year. “Only 12 states and one Union Territory (UT) have raised a total of Rs 37,200 crore so far in FY22, as opposed to the 22 states and one UT that raised Rs 81,005 crore in the comparable period of FY21,”