BUSINESS

‘Fiscal pressures emerging for several states’

Fiscal
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Mumbai, July 12: Fiscal pressures are emerging for several states on the expenditure side, under committed heads, said a Reserve Bank of India (RBI) report, released on Thursday.

Entitled “State Finances: A Study of Budgets of 2017-18 and 2018-19”, the report is an annual publication that provides information, analysis and an assessment of the finances of state governments.

“Visible fiscal pressures are emerging for several states on the expenditure side, particularly under the committed heads and other state-specific schemes like agricultural debt waivers,” the RBI said.

According to the report, in 2018-19, states’ revenue capacity is likely to be augmented with the stabilization of Goods and Services Tax (GST) and the consequent expansion of tax base and efficacy.

“With the implementation of the E-way bill for inter-state movement of goods from April 2018, states could also strive for generating more revenues by locking in efficiency in tax administration,” the report said.
If the revenue receipts of the states end up again in shortfall relative to budgeted levels, then better fiscal marksmanship and efficiency of expenditure is needed for providing robustness to state finances, it added.

While states’ consolidated gross fiscal deficit (GFD) overshot the budget estimates in 2017-18 due to shortfalls in own tax revenues and higher revenue expenditure, for 2018-19, states have budgeted for a correction, mainly emanating from a modest revenue surplus. (IANS)