new Delhi. Rating agency India Ratings has revised the financial outlook of the states from ‘neutral’ to ‘improving’ in the financial year 2022-23. It has said that on the basis of revenue growth, the total fiscal deficit or fiscal deficit of the states can come to 3.6% of their GDP.
Earlier, the rating agency had said that in the next financial year, the fiscal deficit of the states could be up to 4.1 percent of their GDP. It has been forecast to be 3.5 percent of GDP in the financial year 2021-22.
India Ratings said its previous forecast for the fiscal year 2022-23 was “neutral” but is now being changed to “improving”. It said it has revised its outlook forecast with the prospect of better revenue receipts and higher growth in GDP at market value.
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The agency has also projected GDP growth at market prices at the national level at 17.6 per cent in the current financial year, which is better than the previous forecast of 15.6 per cent. It said that in the financial year 2021-22, the gross market borrowing of the states is estimated at Rs 6.6 lakh crore and net market borrowing at Rs 4.6 lakh crore, which is lower than the previous estimates of Rs 8.2 lakh crore and Rs 6.2 lakh crore respectively.
At the same time, the rating agency has estimated the gross market borrowing to be Rs 7 lakh crore and the net market borrowing at Rs 4.63 lakh crore in the next financial year. The situation is expected to improve with the revenue receipts of the states increasing and getting a higher tax share from the Centre. According to the rating agency, its forecast is based on information received from 26 states in the current financial year. The gross revenue receipts of these states grew by 25.1 per cent year-on-year to Rs 16.4 lakh crore during April-November, while their revenue expenditure grew only 12 per cent during the period.
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What is Fiscal Deficit
Fiscal deficit or fiscal deficit means the difference between the income and expenditure of the government. Fiscal deficits show the picture of the economic condition of the country.
Tags: Fiscal Deficit, GDP
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