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Fiscal weakness

State finances can impede growth

Gross domestic product | GDP | GSDP

Business Standard Editorial Comment 

The Covid-19 pandemic-related disruption has had a material impact on government finances all over the world. In the Indian context, while the focus usually is on the Union government, it is critical to not lose sight of state government finances as they do the bulk of the general government spending. States were at the forefront of battling the pandemic, both in terms of providing medical care and supporting the vulnerable sections of the population at a time when revenues took a severe hit. Their finances, as a result, were hit considerably. However, aside from this one-time shock, there are other underlying weaknesses that are affecting a number of states and could become a risk for overall growth and development. Economists at the have done well to highlight some of these risks in their latest monthly bulletin.



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First Published: Wed, June 22 2022. 23:17 IST