Chennai, Aug 26 (SocialNews.XYZ) A majority of Indian states have budgeted to meet the fiscal deficit target of 3.61 per cent from 3.71 per cent in FY22 revised estimates (RE), as per a report from Bank of Baroda.
The bank's economist studied the finances of 21 major Indian states.
In FY23BE, the 21 states analysed have budgeted to meet the fiscal deficit target of 3.61 per cent, down from 3.71 per cent in FY22RE. Revenue deficit is expected to come down to 0.6 per cent from 1 per cent in FY22RE, and primary deficit is expected to remain broadly steady at 1.38 per cent versus 1.44 per cent in FY22RE, the report notes.
In case of fiscal deficits, nine states - Himachal Pradesh, Madhya Pradesh, Telangana, Andhra Pradesh, West Bengal, Karnataka, Uttarakhand, Odisha and Gujarat - expect the deficit to go up in FY23 compared with FY22.
On the other hand, maximum consolidation is projected by states like Bihar, Assam, Goa, and Punjab.
According to the report, among the states which have projected sharp decline in their fiscal deficits, Bihar, Assam, and Goa have done so by aiming for cuts in overall expenditure and jump in their own tax revenues.
Punjab expects consolidation despite increased spending targets.
Revenue balance of 10 states is estimated to be in surplus, with Odisha, Uttar Pradesh, and Jharkhand expecting significant change surplus. States like Assam, Bihar, Goa, Telangana, and Chhattisgarh are expected to turnaround revenue deficit into revenue surplus in FY23.
Amongst the remaining states, while all others have targeted to bring their revenue deficit down, only Karnataka and Himachal Pradesh have projected an even higher deficit in FY23, compared with FY22.
Spending wise, states on an aggregate project to spend Rs 49.5 lakh crore (12.4 per cent up YoY) in FY23, compared with Rs 44.1 lakh crore spent in FY22RE (20.5 per cent YoY).
Barring Assam, Bihar, and Goa, all other states have raised their targets for FY23.
Majority of this increase will come from Uttar Pradesh (Rs 1.3 lakh crore), Maharashtra (Rs 52,000 crore), Andhra Pradesh (Rs 48,000 crore), Telangana (Rs 47,000 crore), and Tamil Nadu (Rs 40,000 crore).
The overall growth will be supported by Rs 37 lakh crore (10.7 per cent) in revenue spending and Rs 6.7 lakh crore (19 per cent) earmarked for capital outlay.
Amongst the 21 sample states, only seven states - Haryana, West Bengal, Uttarakhand, Gujarat, Rajasthan, Andhra Pradesh and Telangana - have projected a decline in committed (pensions plus interest repayment) to revenue expenditure ratio.
On the other hand, Tamil Nadu, Bihar, Assam, Himachal, Maharashtra, and Jharkhand have estimated this ratio to increase in a significant way.
According to the report, capital outlay will see maximum pay out from states like Uttar Pradesh (Rs 1.24 lakh crore), Odisha (Rs 16,000 crore), West Bengal (Rs 14,000 crore), Andhra Pradesh (Rs 12,000 crore), Madhya Pradesh (Rs 9,000 crore), and Maharashtra (Rs 8,000 crore).
Notably, states like Assam, Bihar, Goa and Himachal Pradesh have projected a decline in their capital outlay spending.
Amongst the major states, highest incremental increase in states' own tax revenues is estimated by Uttar Pradesh (Rs 58,000 crore), Maharashtra (Rs 29,000 crore), Tamil Nadu (Rs 21,000 crore), Andhra Pradesh (Rs 17,000 crore), Gujarat (Rs 16,000 crore), Rajasthan (Rs 15,500 crore), Karnataka, Telangana, and Kerala (Rs 15,000 crore), the Bank of Baroda report noted.
Gross borrowing of states in FY23 is estimated to be at Rs 12.4 lakh crore, up from Rs 11.1 lakh crore, with net borrowing at Rs 7.9 lakh crore versus Rs 7 lakh crore last year.
Source: IANS
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