INSUBCONTINENT EXCLUSIVE:
The Reserve Bank of India raised a couple of red flags in the annual report on state finances released on Thursday.
The report added that
visible fiscal pressures are emerging for several states on the expenditure side, particularly on account of pay revisions, interest
payments and other state-specific schemes like farm loan waivers
States budgeted a gross fiscal deficit (GFD) to gross domestic product (GDP) ratio of 2.7 per cent in 2017-18, the revised estimates place
it at 3.1 per cent, essentially due to shortfalls in own tax revenues and higher revenue expenditure, the report added.
The GFD-GDP ratio
crossed the threshold for the third consecutive year.
For 2018-19, the states have budgeted for a consolidated GFD of 2.6 per cent of GDP
This consolidation is aimed to be facilitated by the expansion in revenues as the goods and services tax (GST) stabilises and gains
report added.
It also said that the GST and the e-way bill implementation could boost the tax base and lock in efficiency in tax
administration, re-prioritising expenditures seems essential to avoid further fiscal slippage.
