Government allows 20 states to raise $9.4 billion in loans to meet revenue shortfall

A man counts rupee notes inside a shop in Mumbai, August 13, 2018. REUTERS/Francis Mascarenhas/Files

NEW DELHI (Reuters) - India’s federal government on Tuesday allowed 20 states to raise market loans amounting 688.25 billion rupees ($9.39 billion)to meet revenue shortfall in the current financial year ending in March 2021, a government statement said.

On Monday, a meeting between the federal finance minister and state finance ministers had ended without an agreement over who should borrow to cover revenue shortfalls in states.

While about 20 states, mainly ruled by Prime Minister Narendra Modi’s party and its allies agreed to borrow from the market, around 10 which are run by opposition parties insist that the federal government should borrow and compensate them.

Reporting by Manoj Kumar; Editing by Alison Williams