States' fiscal deficit to widen on decline in nominal GDP growth: India Ratings report

States' aggregate fiscal deficit will be 2.3 per cent of their gross domestic product (GDP) for 2013-14 against the budget estimate (BE) of 2.2 per cent, said a report by India Ratings on Thursday. Finance Minister P Chidambaram had pegged the Centre's fiscal deficit at 4.6 per cent in the revised estimates (RE) against the 4.8 per cent set in the BE for 2013-14. For the next financial year, he projected the deficit to come to 4.1 per cent.

India Ratings projects the states' fiscal deficit to come down to 2.2 per cent in 2014-15. The arm of the Fitch group said the expected fiscal slippage of states in FY14 will mainly be due to the decline in the nominal GDP growth of the national economy. According to the advance estimate by the Central Statistics Office, growth for the year was 12 per cent, against the BE of 13.4 per cent.