A macro view of the fiscal health of States
1 year, 5 months ago

A macro view of the fiscal health of States

The Hindu  

In India, the States mobilise altogether more than a third of total revenue, spend 60% of combined government expenditure, and have a share in government borrowing that is around 40%. Fiscal challenges However, there are significant fiscal challenges that need correction in the short to medium time frame — the most critical being containing the revenue deficit of States. Out of 13 States, fiscal deficits in seven States are primarily driven by revenue deficits; the States being Andhra Pradesh, Haryana, Kerala, Punjab, Rajasthan, Tamil Nadu, and West Bengal. For these seven States, their specific shares of revenue deficit in fiscal deficit for 2023-24 are: Andhra Pradesh, Haryana, Kerala, Punjab, Rajasthan, Tamil Nadu, and West Bengal. A sense of this can be made when the following fiscal numbers are considered: the combined fiscal deficit of these States is 3.71% of GSDP when the all-State average for the same is 2.9%; their combined revenue deficit is 2.15 % of GSDP, when the all-State revenue deficit is 0.78%; their combined debt ratio is higher than the Finance Commission recommended debt ratio for all States for the year 2023-24.

History of this topic

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