You are here: Home » Economy & Policy » News
Business Standard

FY23 Outlook: States' deficit expected at 3.6% of GDP, says Ind-Ra

"The revision was made due to better-than-expected growth in revenue receipts and higher growth in the nominal GDP in FY22," the agency said

Topics
India GDP | State fiscal deficits | Ind-Ra

IANS  |  Mumbai 

Fiscal deficit, debt
Illustration: Binay Sinha

Indian state governments' deficit is expected to come in at 3.6 per cent of the gross domestic product (GDP) in FY23, said India Ratings and Research (Ind-Ra).

The FY23 estimate is a bit higher than the 3.5 per cent revised forecast for FY22. The agency's earlier forecast for FY22 was 4.1 per cent.

"The revision was made due to better-than-expected growth in revenue receipts and higher growth in the nominal GDP in FY22," the agency said.

Besides, estimates India's nominal GDP to grow 17.6 per cent YoY in FY22.

"The quality of the fiscal deficit is likely to improve in FY22 (f) and FY23 (f), after deteriorating during FY20 and FY21(RE) due to the impact of Covid-19 on the states' revenue receipts.

"The aggregate revenue receipts of the 26 states grew 25.1 per cent YoY to Rs 16.4 trillion during April-November FY22. Revenue expenditure of the 26 states grew 12 per cent YoY during April-November FY22."

The agency said that an economic recovery led to pick-up in own-revenue collection, combined with higher than budgeted tax devolution from the Centre, would moderate states' aggregate revenue deficit to 0.73 per cent of GDP.

"Even with a continuing revenue deficit, the states have greater leg-room to undertake higher capital expenditure in FY23 due to the Rs 1 trillion financial assistance by way of the 50-year interest-free loans extended by the Union government in its FY23 budget.

"The agency expects capex to GDP ratio to be higher at 3.04 per cent in FY23(f) than 2.84 per cent in FY22 (f). The fiscal deficit, therefore, would be largely channelised towards the development of state infrastructure in FY23.ind-

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 19 2022. 07:04 IST
RECOMMENDED FOR YOU
.