India Ratings (Ind-Ra) expected the aggregate fiscal deficit of states would likely to be at 4.3 per cent of gross domestic product (GDP) for the next fiscal year compared with 4.6 per cent in the current fiscal year.
The agency’s earlier forecast for FY21 was 4.5 per cent. The revision was made due to a sharper-than-expected contraction of 6.1 per cent in the nominal GDP.
Ind-Ra estimated the nominal GDP to grow 14.5 per cent in FY22, and believed a gradual pick-up in revenue collections could lead to an improvement in the capital expenditure from the next fiscal year.
The share of capex in the total expenditure is likely to be higher at 15.5 per cent in FY22 (2.9 per cent of GDP) than expected 10.5 per cent in FY21 (2.1 per cent of GDP), it said.
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.