In addition, greater recourse by Government, especially since calendar year 2009, to long-term foreign loans and grants to finance a significant part of its budget deficit – irrespective of its devastating double effect on rupee liquidity, which I discuss elsewhere – also contributed to lengthen the maturity structure of public debt.
As an example, when one looks at the recommendations contained in the April FSF Report, they hardly look controversial and one might wonder why they hadn’t been adopted before. The answer seems to be that the financial industry opposed them until now and lobbied strong enough to avoid that they became legislation.