New Delhi, Feb. 5 -- A World Bank report submitted to the 16th Finance Commission has found that nearly 20 years of Fiscal Responsibility Laws (FRLs) at the state level in India have not fully succeeded in reducing debt levels across major states, even though they have helped improve headline fiscal deficits, the report said.

According to the analysis, while FRLs are linked with deficit reduction, debt levels have remained elevated and uneven among several large states. Highly indebted states such as Kerala, Punjab, Rajasthan, Andhra Pradesh and West Bengal continue to carry significant debt burdens, whereas states like Gujarat managed to reduce debt substantially.

The report highlights that consolidation efforts often came at the expen...