The states must get their fiscal act together
2 years, 3 months ago

The states must get their fiscal act together

Live Mint  

Central bankers driving the current round of monetary tightening in the world are looking askance at fiscal laxity, which could grow the inflation disease even as monetary medicine is being applied. The Centre’s budgeted fiscal deficit for 2022-23 at ₹16.6 trillion, was 6.4 % of gross domestic product as then projected, but 6.2 % of the likely GDP for 2022-23 of ₹269.5 trillion. In March 2022, the finance ministry at the Centre notified states that their off-budget borrowing during 2022-21 and 2021-22 would have to be brought on-budget during 2022-23 and deducted from their FFC entitlement for the year. But since states also deal with unmet expenditures by the simple device of axing smaller schemes which don’t matter from an electoral viewpoint, instead of borrowing, the estimate does overstate off-budget borrowings. Even if the stock is estimated at ₹6 trillion, that is still 2.2% of GDP, which would leave states with new borrowing of just 1.3% of GDP out of their permissible total of 3.5%.

States Power State Centre Trillion Gdp Fiscal Borrowing Discoms Borrowings Gencos Ffc  states  act  state  finance  borrowings  borrowing  offbudget  fiscal  trillion  power  gdp

History of this topic

Budgetary allocations in UP: 67% funds used so far, efforts on to utilise money by March 31
9 months, 2 weeks ago

Budgetary allocations in UP: 67% funds used so far, efforts on to utilise money by March 31

Hindustan Times  

LUCKNOW With the current financial year ending on March 31, 2024, the state government has so far used nearly 67% of the budgetary funds and efforts have been stepped up to ensure that departments make use of the funds without compromising on quality. The state government got an annual budget of ₹ 6.90 lakh crore approved from the state legislature …

Data | Five Southern States took off-Budget loans worth ₹2.34 lakh crore in FY21
1 year, 9 months ago

Data | Five Southern States took off-Budget loans worth ₹2.34 lakh crore in FY21

The Hindu  

While tabling the Budget a week ago, Telangana Finance Minister T. Harish Rao accused the Centre of “creating hurdles after hurdles” in the development of the State. Five Southern States — Telangana, Andhra Pradesh, Kerala, Tamil Nadu and Karnataka — accounted for ₹2.34 lakh crore, around 93%, of the total off-Budget liabilities of eleven major States analysed. In almost all …

States may undershoot planned borrowings for Jan.-March: analysts
1 year, 11 months ago

States may undershoot planned borrowings for Jan.-March: analysts

The Hindu  

States may not borrow as much as the record $41 billion they plan to in the January-March quarter, which will help keep the spread between State and central government bond yields in check, analysts said. States plan to sell bonds worth ₹3.41 trillion, the highest quarterly borrowing ever scheduled, in the last three months of the financial year, according to …

Indian states may undershoot planned borrowings for Jan-Mar quarter: Analysts
1 year, 11 months ago

Indian states may undershoot planned borrowings for Jan-Mar quarter: Analysts

Live Mint  

Indian states may not borrow as much as the record $41 billion they plan to in the January-March quarter, which will help keep the spread between state and central government bond yields in check, analysts said. States plan to sell bonds worth 3.41 trillion rupees, the highest quarterly borrowing ever scheduled, in the last three months of the financial year, …

Is the Centre fair in imposing cuts in borrowing limits of States retrospectively?
2 years, 2 months ago

Is the Centre fair in imposing cuts in borrowing limits of States retrospectively?

Deccan Chronicle  

The need for maintaining fiscal sustainability is unquestionable. While the Centre has been consistent in flouting the limits mandated under the Fiscal Responsibility and Budget Management Act with impunity, states have by and large maintained their fiscal indicators within limits. While communicating the net borrowing ceilings of states for the financial year 2022-23, the Centre, for the first time, indicated …

Why it’s time to worry about state finances
2 years, 5 months ago

Why it’s time to worry about state finances

Live Mint  

State governments are confronting various fiscal risks, particularly heavy debt, says the Reserve Bank of India’s latest bulletin. However, a rising trend in providing freebies such as free power, water, and gender-based free bus rides in many states have eaten into the expenditure pie. Power sector accounts for a large portion of states’ financial burden, since dues owed by discoms …

Govt Allows to 10 States to Borrow Additional Rs 28,204 Cr for Power Sector Reforms
2 years, 8 months ago

Govt Allows to 10 States to Borrow Additional Rs 28,204 Cr for Power Sector Reforms

News 18  

The finance ministry on Thursday said 10 states were given the permission to borrow an additional Rs 28,204 crore in FY22 for undertaking power sector reforms. “Department of Expenditure, Ministry of Finance, has granted additional borrowing permission of Rs 28,204 crore to 10 states for undertaking the stipulated reforms in power sector in 2021-22,” it said in a statement. In …

Govt. agrees to maintain States’ share in the divisible pool of taxes
3 years, 10 months ago

Govt. agrees to maintain States’ share in the divisible pool of taxes

The Hindu  

The government has accepted the Fifteenth Finance Commission’s recommendation to maintain the States’ share in the divisible pool of taxes to 41% for the five-year period starting 2021-22, and given an ‘in-principle’ nod to the panel’s suggestion to set up a separate non-lapsable fund for defence and internal security modernisation. The Commission’s report, which was submitted to the President in …

Fiscal deficit of states to hit peak of ₹8.7 lakh crore, says CRISIL
3 years, 11 months ago

Fiscal deficit of states to hit peak of ₹8.7 lakh crore, says CRISIL

The Hindu  

The States are headed for a fourfold expansion in their revenue deficit this fiscal over the last year due to far lesser tax collections, Crisil Ratings said in a report. “This will not only expand States’ aggregate gross fiscal deficit to an all-time high of ₹8.7 lakh crore, or 4.7% of GSDP, but also skew its composition towards revenue deficit …

States' Market Borrowings Jump 55% to Rs 3.75 Lakh Crore So Far This Fiscal
4 years, 2 months ago

States' Market Borrowings Jump 55% to Rs 3.75 Lakh Crore So Far This Fiscal

News 18  

The states' market borrowings have jumped 55 per cent to Rs 3.75 lakh crore so far this fiscal, or 75 per cent of the budgeted amount, with 17 of them raising an additional Rs 22,350 crore from the latest auction of state development loans held on Tuesday. So far this fiscal year, 28 states and two Union Territories have cumulatively …

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