It can call into question the validity of the instruments, which, to be valid, need to be correlated with debt growth and yet be unaffected by economic growth. This assumption, however, is unlikely to be correct because poor prospects for economic growth surely raise credit risk, thereby leading to a higher TED spread and less willingness to lend on the part of banks.
•  Loan waiver schemes or employment not resulting into creation of social infrastructure /productive assets raise risk to broader work culture/credit culture in the country  •  Non-adherence to basic economic discipline by the states eg.