It is at least conceivable that a large and persistent rise in the exchange rate may have effects on the economy beyond those discernible from the experience of the past thirty years, if previous rises in the exchange rate were not long-lived enough to cause significant structural change.
In fact, some state governments are buying back their debt from the market and a few others are reducing their planned market borrowings. We recognize two important areas that, if addressed, would result in fiscal empowerment both at the centre and the states.