Indian states' fiscal deficit rose nearly 79 per cent after lockdown: RBI

The RBI's Handbook of Statistics on Indian States showed that apart from Arunachal Pradesh, Haryana, Sikkim and Odisha, all the states saw a higher fiscal deficit in FY21 as compared to FY20

The gross fiscal deficit of the Indian states rose nearly 79 per cent after the lockdown. According to the latest data from the Reserve Bank of India (RBI), the fiscal deficit rose from Rs 5.2 trillion in FY20 to Rs 9.3 trillion in 2020-21 (FY21). In FY22, the deficit fell to Rs 8.1 trillion but stood much higher than the pre-pandemic level. 

 

A fiscal deficit is a difference between the state's revenue and spending. It shows the shortfall in revenue. 

 

The data released in the RBI's Handbook of Statistics on the Indian States showed that except Arunachal Pradesh, Haryana, Sikkim and Odisha, all the states saw a higher fiscal deficit in FY21 as compared to FY20. 

 

In the case of the Centre, the fiscal deficit jumped from 4.6 per cent in FY20 to 9.3 per cent of the Gross Domestic Product (GDP) in FY21. 

 

In FY21, the highest fiscal deficit was recorded in Tamil Nadu at Rs 1.04 trillion. Maharashtra follows it with Rs 87,697 crore and Uttar Pradesh with Rs 80,852 crore. 

 

According to a report by Mint, in the budget for 2022-23, Rs 1 trillion was allocated as interest-free 50-year capex loans for states to be spent on new or ongoing projects. This included projects like Gati Shakti, the PM Gram Sadak Yojana and digitization.

 

The report added that Karnataka, Kerala, Madhya Pradesh and Maharashtra witnessed a marginal decline in their tax revenue receipts in FY21. In other states, too, the collections were steady. The highest fall in own tax revenue was seen in Kerala.