Context: Both the Union and the states are in need of greater debt on account of lower tax collections. There is a need to create an institutional infrastructure which allows expansion in government borrowings.
Factors necessitating large borrowing
Way Forward: Creating an institutional arrangement for borrowing requires following 3 elements -
Conclusion: A greater institutionalised capacity for borrowing by the Union and the states is necessary to assist the economy when there is a decline in gross domestic product (GDP).