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India’s state borrowers are crowding out cash-strapped companies

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Indian companies struggling against the coronavirus pandemic and a domestic credit crunch are facing another obstacle: competition from state governments to sell debt.

Indian companies struggling against the coronavirus pandemic and a domestic credit crunch are facing another obstacle: competition from state governments to sell debt.

States in Asia’s third-biggest economy are planning to crank up bond sales by 18.2% this quarter from a year earlier to make up for a decline in tax revenue due to an economic slowdown.

They usually have lower credit risks than companies, and are offering higher yields than before, which could entice investors.

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