India Economy Watch - General Government Fiscal Deficit At 13.3% Of GDP In FY21: Motilal Oswal
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Motilal Oswal Report
Based on the monthly accounts available for 18 states (together accounting for ~90% of all states), total spending by the states increased 5.5% YoY in FY21, with total receipts falling 5.2% YoY.
Therefore, the states’ fiscal deficit rose to Rs 8 trillion (or 4% of gross domestic product) in FY21 from Rs 5 trillion (or 2.5% of GDP in FY20).
States’ total tax receipts (inclusive of devolution from the center) declined 5.5% in FY21, marking the second consecutive fall; this was following a contraction of 4% YoY a year ago.
The states’ own taxes fell (by 4%) for the first time in the past three decades.
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