Home / Economy / News / In absence of GST compensation, states may cut FY21 capex by Rs 3 trn: ICRA

In absence of GST compensation, states may cut FY21 capex by Rs 3 trn: ICRA

The borrowing alternative offered by the Centre to make up for the shortfall in the promised compensation will lead to the states' fiscal deficits widening to 4.25 - 5.52 per cent

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Finance Minister Nirmala Sitharaman had last month said the economy is facing an extraordinary 'Act of God' situation, which may result in economic contraction

Press Trust of India Mumbai

3 min read Last Updated : Sep 09 2020 | 9:54 PM IST

Not paying the full GST compensations by the Centre is among the factors which may result in up to Rs 3 trillion cut in capital expenditure by the states in FY21, a report said on Wednesday.

The borrowing alternative offered by the Centre to make up for the shortfall in the promised compensation will lead to the states' fiscal deficits widening to 4.25 - 5.52 per cent, rating agency Icra has said in the report.

In the current fiscal, the compensation requirement of states has been estimated at Rs 3 trillion, of which Rs 65,000 crore would be funded from

Topics : Fiscal Deficit Nirmala Sitharaman ICRA Shortfall in GST Revenues GST compensation GST reveunes State fiscal deficits State revenues Finance Ministry State govt market borrowings India bond market

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