Motilal Oswal: States’ Fiscal Deficit At 37% Of Budget Estimate For Q1 FY21; Total Capex By Government Grows Just 2% YoY In Quarter
A customer counts Indian one-hundred rupee banknotes before depositing them at a bank in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Motilal Oswal: States’ Fiscal Deficit At 37% Of Budget Estimate For Q1 FY21; Total Capex By Government Grows Just 2% YoY In Quarter

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

The tussle between the central government and states has come to the fore recently. When one looks at the states’ finances in Q1 FY21, the bone of contention becomes clear as day.

Based on the monthly accounts available for 14 states (together accounting for approximately 63% of all states), the total receipts of the states declined 18.2% YoY in Q1 FY21, while total spending grew by just 2.7% YoY during the quarter.

Interestingly, while total spending stood at 18.4% of budget estimate, similar to that in previous years, the states’ fiscal deficit was 36.5% of BE in Q1 FY21, more than double that in previous years.

Details related to the receipts suggest the states’ total tax receipts (including centre’s devolution) fell 32.1% YoY and non-tax revenue receipts fell 27% YoY in the first quarter of FY21.

Conversely, grants from the center grew by 56% during the quarter.

Within the states’ own taxes, the collection of stamp duties and registration charges shrank 58% in Q1 FY21.

Click on the attachment to read the full report:

Motilal Oswal Ecoscope State Fiscal Deficit.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.