States' fiscal deficit to narrow to 4.3% of GDP in FY22: Ind-Ra

Topics State fiscal deficits | Ind-Ra | GDP

Ind-Ra estimated the nominal GDP to grow 14.5 per cent in FY22, and believed a gradual pick-up in revenue collections could lead to an improvement in the capital expenditure from the next fiscal year
India Ratings (Ind-Ra) expected the aggregate fiscal deficit of states would likely to be at 4.3 per cent of gross domestic product (GDP) for the next fiscal year compared with 4.6 per cent in the current fiscal year.

 
The agency’s earlier forecast for FY21 was 4.5 per cent. The revision was made due to a sharper-than-expected contraction of 6.1 per cent in the nominal GDP.

 
Ind-Ra estimated the nominal GDP to grow 14.5 per cent in FY22, and believed a gradual pick-up in revenue collections could lead to an improvement in the capital expenditure from the next fiscal year.

 
The share of capex in the total expenditure is likely to be higher at 15.5 per cent in FY22 (2.9 per cent of GDP) than expected 10.5 per cent in FY21 (2.1 per cent of GDP), it said.


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