State finances improve, gross fiscal deficit declines 31.5%: RBI report

In addition to the regular instalment of tax devolution, the Centre released two advance instalments of in November 2021 and January 2022.

State finances showed improvement in 2021-22 as the consolidated gross fiscal deficit (GFD) of 26 states was lower by 31.5 per cent than a year ago.

The GFD declined mainly due to higher growth in revenue receipts (30.5 per cent in FY22) as against a contraction of 8.6 per cent in 2020-21, according to the Reserve Bank of India’s Annual Report for FY22. This is based on the information available for these states for April-February 2021-22

State government finances were budgeted to improve in 2021-22 with the GFD-GDP ratio narrowing to 3.5 per cent from 4.7 per cent in the