States’ fiscal deficit Rs 4,93,360 cr in FY16; Rajasthan, UP lead

New Delhi, June 24 (IANS) The fiscal deficit of all states was a whopping Rs 4,93,360 crore in 2015-16, with Rajasthan and Uttar Pradesh accounting for Rs 1,31,670 crore, or 26 per cent of the total deficit, RBI data showed on Saturday.

According to the Budget estimates, though the fiscal deficit of all states is expected to come down to Rs 4,49,520 crore in 2016-17, Rajasthan and Uttar Pradesh would continue to have the highest fiscal deficits of Rs 43,150 crore and Rs 49,960 crore respectively, according to the Reserve Bank of India's 'Handbook of Statistics on Indian States' released here on Saturday.

With Uttar Pradesh, Maharashtra, Karnataka and Punjab announcing farm loan waivers in the current fiscal, the risk of fiscal slippages has further increased.

From 1990-91 till 2015-16, the combined fiscal deficit of all states zoomed 2,525 per cent from Rs 18,790 crore to Rs 4,93,360 crore.

Raising concerns over the state governments' action to waive farm loans, RBI Governor Urjit Patel earlier said such actions increase the risk of slippages.

"Unless there is existing fiscal space in the state Budgets, the states should avoid going down the slippery path of farm loan waivers. It can erode the fiscal gains made over the previous 2-3 years," Patel had said.

The lowest fiscal deficit was recorded by Mizoram at Rs 160 crore in 2015-16, which is expected to go down further to Rs 20 crore in 2016-17.

While Bihar's fiscal deficit stood at Rs 28,510 crore in 2015-16, Gujarat's was at Rs 22,170 crore.

Other states with high fiscal deficits in 2015-16 are Haryana (Rs 30,400 crore), West Bengal (Rs 25,180 crore), Tamil Nadu (Rs 32,360 crore), Maharashtra (Rs 37,950 crore), and Assam (Rs 25,650 crore).

Jammu and Kashmir's fiscal deficit stood at Rs 8,380 crore in 2015-16, which is expected to increase further to Rs 11,610 crore.

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