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Fiscal Developments 69

(GSDP) to States in the power sector. The objective of the additional borrowing space is to
improve the operational and economic efficiency of the sector, and promote a sustained increase
in paid electricity consumption. This special dispensation has been recommended for each year
for a four-year period from 2021-22 to 2024-25.
2.46 As per 2021-22 Budget Estimates of the State Governments, the States’ combined
own Tax revenue and own Non-Tax revenue were anticipated to grow at 28.5 per cent and
36 per cent respectively over 2020-21 RE, as against the low growth displayed in 2020-21 RE.
On the expenditure side, revenue expenditure and capital expenditure in 2021-22 BE were
envisaged to grow at 12.1 per cent and 30.5 per cent respectively over 2020-21 RE (refer to
Table 7).

2.47 The RBI Study on State Finances highlights that the States have budgeted for a higher
capital outlay in 2021-22 BE vis-à-vis 2020-21 RE. The increased Capex outlays by the States
are in sectors such as medical and public health, urban development, water supply and sanitation,
irrigation and transport. In order to emphasize the importance of the States’ fiscal policy towards
capital expenditure, Central Government has continued the Scheme for Special Assistance to
States for Capital Expenditure for 2021-22. The steps taken by the Central Government to
support the State Governments towards a faster economic recovery amidst the COVID-19
pandemic may be seen in Box 3.

Table 7: Fiscal Indicators of States
Items 2016-17 2017-18 2018-19 2019-20 2020-21(RE) 2021-22 BE

(in ` lakh crore; Numbers in parenthesis are growth rates)

9.46 11.3 12.15 12.24 12.41 15.95
Own Tax Revenue
(11.3) (19.5) (7.5) (0.7) (1.4) (28.5)

1.7 1.8 2.19 2.61 2.11 2.87
Own Non-Tax Revenue
(14.0) (5.3) (21.7) (19.2) (-19.2) (36.0)

21.22 23.4 26.38 27.92 31.86 35.72
Revenue Expenditure
(15.3) (10.3) (12.7) (5.8) (14.1) (12.1)

5.17 4.31 4.87 4.6 5.54 7.23
Capital Expenditure
(23.1) (-16.6) (13.0) (-5.5) (20.4) (30.5)

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