One of the important factors for a country to sustain growth is sound fiscal health. A recent report by the RBI has raised concerns on states' finances and warned that the high debt-to-GDP ratio in a few states might lead to a debt trap in the future. One of the primary reasons that have resulted in high debt across states like Punjab, Haryana, Rajasthan and Andhra Pradesh has been the lack of fiscal prudence while balancing between welfare schemes and developmental expenditure.
