the paper) suffered by a state was not West Bengal but Bihar, at 9.39 per cent. West Bengal came in a shade better at 9.35 per cent. Gujarat papers enjoyed an yield of 9.22 per cent, which means the markets were treating it as aeons ahead in terms of fiscal performance.
Do remember the papers were priced at a free auction. The buyers were predominantly public sector banks and not foreign investors who can be expected to have biases. The public sector banks should know what is happening in the Mantralaya of each state government. Even Gujarat is not the best as far as they are concerned. That accolade is reserved for Tamil Nadu whose debt papers were priced at 9.2 per cent.
Subhomoy is a Deputy Editor based in New Delhi.