New Delhi, Jan 29: With all states barring Maharashtra and West Bengal agreeing to exchange high cost interest bearing bonds with softer loans, the Centre will start the debt swap very soon. "It could be very soon, this week or this month as 26 states have agreed to centre's debt swap proposal," Finance Secretary S Narayan told reporters.

Maharashtra and West Bengal are the two states which have not agreed, and they account for nearly 40 per cent of of the loans to states, mostly from small savings accruals.
In the face of the severe debt burden of states at Rs 5,800 billion, the centre proposed the debt swap at the chief ministers' conference convened convened last year to find ways to overcome the difficult fiscal situation.
Maharashtra and West Bengal have not agreed so far as they want the proposal to be improved upon further considering the magnitude of the debt.
Last year, Centre agreed to swap debts worth Rs 250 billion- Rs 150 billion on accont of small savings and the remaining for market borrowings by states. Bureau Report