Post stimulus, fiscal deficit of Centre, states to be at 12% of GDP: Report

In the case of states, the fiscal gap will rise by 200 bps after the Centre hiked the borrowing limit of states to 5 per cent of GSDP on Sunday

The combined fiscal deficit of the Centre and states will top 12 per cent of the GDP because of the recent economy-boosting measures, and higher borrowings by States to meet COVID-19 exigencies says a report. According to a report by DBS Bank, the combined fiscal gap will increase by 480 basis point (bps).

In the case of the Centre, the fiscal gap will increase by 200 bps as earlier this month it hiked market borrowings by a whopping Rs 4.2 lakh crore or 54 per cent over the budget estimate to Rs 12 lakh crore, citing the pandemic. Another 80