Opinion | Need to focus on state government finances4 min read 15 Aug 2018, 08:24 PM IST
States need to be cautious as they get higher expenditure responsibilityand this is not going to be easy given their limited autonomy in revenue collection
The widening of the fiscal deficit has re-emerged as a cause of concern for the Indian economy. There is a fear that the Central government could overshoot its fiscal deficit target for FY19 as goods and services tax (GST) revenue has been falling short of target and there could be increased expenditure commitment in a pre-election year. Also worrying are the finances of state governments. As per a recent Reserve Bank of India (RBI) report on state government finances, the consolidated fiscal deficit of the state governments in FY18 was 3.1%, against the budget estimate of 2.7%.