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States' fiscal deficit likely to hit 4.2-5.5% of GSDP this fiscal year

This may take the general deficit of the country-- both the Centre's and states'-- to 11-14 per cent of GDP in FY21

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Experts cautioned that their figures were at the aggregate level and individual states may have varying fiscal deficit numbers

Indivjal Dhasmana New Delhi

4 min read Last Updated : Aug 31 2020 | 1:44 AM IST

Economists expect states’ fiscal deficit to touch anywhere in the range of 4.2 per cent to 5.5 per cent of their respective gross state domestic products (GSDPs) in this fiscal year. This is after the two options given by the Centre to them to meet the revenue loss under the goods and services tax (GST) system.

This may take the general deficit of the country – both the Centre’s and states’ – to 11-14 per cent of GDP in FY21. Even the Centre did not give a broad relaxation in terms of the ceiling for fiscal responsibility and budget management (FRBM)

Topics : Goods and Services Tax Coronavirus Lockdown State fiscal deficits GSDP State govt market borrowings central government GST compensation Shortfall in GST Revenues