Page 94 - economic_survey_2021-2022

68 Economic Survey 2021-22

2.43 Under the scheme, retail investors will be able to open a Retail Direct Gilt (RDG) account
using an online portal through which it can directly invest minimum of `10,000 and maximum
of `2 crore per security. The retail investors can not only place a non-competitive bid in primary
issuance of all Central & State Government securities such as Treasury Bills and bonds but also
access Secondary market through Negotiated Dealing System-Order Matching (NDS OM) -
RBI’s trading system, which was previously accessible only to select financial institutions. As of
now, bulk of the G-Sec is held by few institutional investors like commercial banks, insurance
companies and mutual funds. Diversified investor base provides flexibility to the Government
in its borrowing program. Also, it would enable stable demand for G-sec from different investor
categories.

State Finances
2.44 The Gross Fiscal Deficit of States is estimated to cross the Fiscal Responsibility Legislation
(FRL) threshold of 3 per cent of GDP during 2020-21 RE and 2021-22 BE. The Revenue Deficit
of the States also increased from 0.1 per cent of GDP in 2018-19 to 2 per cent of GDP in
2020-21 (RE) (Figure 20). This relaxation in borrowing limits was allowed on account of the
additional expenditure needs and constrained revenues of the States due to COVID-19. The net
borrowing ceilings of the States were enhanced to 5 per cent of GSDP of the States for the year
2020-21 and 4 per cent of GSDP of the States for 2021-22. The details may be seen in Box 3.
Both Gross Fiscal Deficit and Revenue Deficit for the States are budgeted to decline in 2021-22
from the high levels they reached in 2020-21.

Figure 20: Major deficit and debt indicators of States

5.0 31.1 31.2 35.0

4.0 22.3 22.0 23.7 25.1 25.1 25.3 26.3 28.0
Per cent of GDP 3.0 4.6 3.7 21.0 Per cent of GDP

2.0
14.0
1.0 2.2 2.6 3.1 3.5 2.4 2.5 7.0
2.6

0.0 0.0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (RE) 2021-22 (BE)

Gross Fiscal Deficit Revenue Deficit Debt-GDP (RHS)

Source: RBI State Finances: A Study of Budget; RE: Revised Estimates ; BE: Budget Estimates
Note: States include 29 states and 2 Union Territories with legislatures.
2.45 In addition to the net borrowing ceilings fixed for the States, XV-FC had recommended
performance based additional borrowing space of 0.50 per cent of Gross State Domestic Product