Page 450 - ES 2020-21_Volume-1-2 [28-01-21]

Fiscal Developments 77

Figure 16: Major deficit and debt indicators of States

4 30
26.3 26.6
25.1 25.1 25.2
23.7 25
3 22.6 22.3 22
20
Percent of GDP 2.0 2.2 2.6 3.0 3.5 2.4 2.6 2.8 15 Percent of GDP
2

2.4
1
10
0 5
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

-1 2019-20 (PA) * 2020-21 (BE) 0

Gross Fiscal Deficit Revenue Deficit Debt-GDP (RHS)
Source: RBI State Finances: A Study of Budget; PA: Provisional Actuals ; BE: Budget Estimates
Note: States include 29 states and 2 Union Territories with legislatures.
*Data on GFD and Revenue Deficit for 2019-20(PA) for all states has been estimated by RBI by using
accounts figures of 24 states available with CAG and 2019-20 BE figures for the remaining 7 states/UTs ;
Data for Debt- to-GDP for 2019-20 is Revised Estimates.

2.46 The RBI Study on State Finances highlights the decline in actual capital spending relative
to BE observed in the states for the last 3 years (2017-18 Actuals, 2018-19 Actuals and 2019-
20PA). This may have adverse implications for the pace and quality of economic development,
given the high fiscal multiplier effect of capital expenditure. In fact in the current year, when the
states are dealing with the pandemic with a constrained fiscal space, capital expenditure can play
a pivotal role in the recovery process. In order to re-orient the focus of the States’ fiscal policy
on capital expenditure, Central Government has announced Scheme for Special Assistance to
States for Capital Expenditure during FY2021, which has been discussed in Box 7.

Table 12: Fiscal Indicators of States

Items 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
RE BE
(in ` lakh crore)

Own Tax Revenue 8.5 9.46 11.3 12.2 13.4 15.0
(9.0) (11.3) (19.5) (7.5) (10.3) (11.8)
Own Non-Tax Revenue 1.5 1.7 1.8 2.2 2.4 2.7
(7.1) (14.0) (5.3) (21.7) (9.1) (12.1)
Revenue Expenditure 18.4 21.22 23.4 26.4 30.8 33.3

(12.2) (15.3) (10.3) (12.7) (16.6) (8.2)
Capital Expenditure 4.2 5.17 4.3 4.9 5.8 6.5
(40.0) (23.1) (-16.6) (13.0) (18.7) (11.8)

Source: RBI State Finances: A Study of Budget for 2020-21,
RE: Revised Estimates; BE: Budget Estimates; Numbers in parenthesis are growth rates
Note: States also includes 2 UTs (Delhi and Puducherry) from 2017-18