Abstract
This study attempts to measure the relative debt burden of 18 major states of India by grouping them into high-, middle- and low-income states for the post– Fiscal Responsibility and Budget Management (FRBM) Act, 2003 period (from 2005–2006 to 2018–2019) through developing a new debt burden index (DBI) using the relative-distance method. Data are sourced from ‘Handbook of Statistics on Indian States’ published by the Reserve Bank of India (RBI). Using DBI, the study shows the interstate variations in debt burden and thereby compares debt management across the states. The analysis reveals that the debt burden has been consistently declining in the case of low-income states, whereas it has been increasing for both middle- and high-income states. DBI may be used as an important input for the credit rating for State Development Loans (SDLs). JEL Classification: H63, H74, C43
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