Fiscal Health

The FHI covers 18 large states and has been developed with a focus on five sub-indices: The quality of expenditure, revenue mobilisation, fiscal prudence, debt index, and debt sustainability

ICRA, in its report on Budget expectations, estimated the fiscal deficit target for FY2026 to be set at 4.5 per cent of GDP

Kerala Finance Minister K N Balagopal on Saturday said that despite a fiscal pressure, the state government made payments to the tune of Rs 26,000 crore to various sectors in March alone. Talking to the media after visiting the treasury here in the state capital on the last working day of the fiscal year, Balagopal said, "We made payments to the tune of Rs 26,000 crore in this March alone. This is higher than the last fiscal year. We made payments to various sectors at a time when we were facing financial pressure." He said the state government effectively intervened to manage the financial crisis and an interim application on the borrowing limit and other matters are pending before the Supreme Court. Balagopal added that the apex court recently ruled in the state's favour as there was substance in its arguments regarding the financial strangulation. The apex court was hearing a suit filed by the Kerala government that alleged that the Union of India was regulating the state's ...

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The RBI working group also recommended that besides charging a guarantee fee, states may levy an additional risk premium based on the risk category and the tenor of the underlying loan

Chhattisgarh, one of the poorest states in the country, is the second best in overall fiscal health scorecard after Maharashtra, and ahead of Telangana, while the bottom three are Bengal, Punjab and Kerala, shows a report by a foreign brokerage. Based on the FY24 first budget estimates, the top three states are Maharashtra, Chhattisgarh and Telangana, and the bottom three states are Bengal, Punjab and Kerala, shows a report on the fiscal health of the key 17 states, penned by Kaushik Das, the chief economist at Deutsche Bank India. Based on the FY23 revised budget estimates, Maharashtra tops the ranking, followed by Chhattisgarh, Orissa, Telangana and Jharkhand. In contrast, Bengal fares the worst, followed by Punjab, Bihar, Rajasthan and UP, Kerala moving out of the worst five; while Andhra' ranking has dropped to 11th in FY23 from eighth in FY22, and Gujarat has slipped to the seventh rank from fifth. However, based on the revised FY22 actual budget data of 17 key states, ...

States must urgently push for debt consolidation, create capex buffers

Most states are likely to be in better fiscal health this financial year as 20 of them are collectively carrying forward Rs 2.6 lakh crore borrowed in FY21 to this fiscal, says a report. This also explains why the states have been borrowing less so far this year despite the pandemic-driven revenue crunch and the soaring public expenses towards health and food, as per the Icra Ratings report released on Friday. Given the pandemic and the resultant financial crunch, the Centre allowed states to borrow up to 5 per cent of their gross state domestic product (GSDP) -- resulting in an aggregate borrowing of Rs 8.5 lakh crore -- in FY21 as they faced massive drop in revenues and higher expenses towards supporting the people hit by the lockdowns. As of August 10, when the state debt was auctioned last, the borrowings by the states so far in FY22 has been 11 per cent less year-on-year and 15 per cent lower than the amounts shown in the indicative auction calendar. A total of 23 states and .

India is among the 11 emerging markets (EMs) that have jumped on the QE bandwagon

Govt's total receipts during April-February stood at Rs 14,13,096 cr or 88.2% of the revised estimates presented in the Budget on Feb 1

If the Finance Commission recommends a smaller tax share for states, the Centre will get more money. On what that would do to 'cooperative federalism', you don't need to guess, writes T N Ninan

The fragility of central government finances is partly legacy, part refusal to acknowledge and address the problem due to the lack of strategic vision and poor institutional capability

The problem is on both revenue and expenditure sides - the former is shrinking in relation to GDP, and the latter is rising despite a sharp drop in petroleum-related subsidy bills - writes T N Ninan

Here's a selection of Business Standard Opinion pieces for the day

The coronavirus pandemic may wipe out all the gains made in poverty alleviation in South Asia, says World Bank

"We have decided to constitute a fiscal committee, which will address one particular recommendation contained in our terms of reference regarding a legal framework for the fiscal architecture," Singh

The government's numbers on expenditure and receipts in the first half of the current year do not fully reveal the stress in its finances

If we go on being inward-looking, how will the system open up? Those that are not competitive locking competitive ones out of markets cannot be a way to get to the $5-trn dream, writes T N Ninan

Though the figure seemed alarming, it was bit lower than 95.3 per cent in the corresponding period of 2018-19

Greater clarity and caution from the finance ministry is needed