Even if it is assumed that the centre and the states comply with their respective FRBMs, their combined fiscal deficit would  6  BIS Review 113/2006  continue to remain above 6 per cent by 2009-10. Generally, one would presume that India remains somewhat vulnerable to the impact of global imbalances on this account.
However, the Indian case is unique as the Government does not resort to external financing to finance domestic debt. This would help India in not being subject to the consequences of global imbalances. In addition, both Reserve Bank of India and Government of India have undertaken various initiatives to develop the government securities market.