RBI Review of State Finances

Key takeaways

• States have budgeted their consolidated gross fiscal deficit (GFD) at 2.8% of GDP in 2020-21. Although the RE for 2019-20 placed the GFD at 3.2%, provisional accounts released by the CAG indicate that this was achieved through large cutbacks on both revenue and capital expenditure to compensate for cyclical shortfalls in tax collections.

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