Balancing state Budgets: Here're the pain points and what's on offer

Pain points

Many states are switching to the old pension scheme. This increases the liability on state Budgets.

State government finances are still facing the effects of the pandemic. Many are borrowing increasing amounts to meet regular expenses. Many are providing subsidies that may not be sustainable, and alarm bells are sounding on high debt burdens.

 

What’s on offer

The Centre is providing support to state governments for capex through loans with extended tenures. This is expected to help create long-term assets at the level of states

Push for promoting municipal bonds to fund urban spending. Cities being incentivised to improve finances. Property tax governance reforms and ring-fencing user charges on urban infrastructure