Although the fiscal deficit will remain above the 3 per cent mark in 2021-22, states are expecting a 1 per cent decline in fiscal deficit (as a per cent of their gross state domestic product) from 4.7 per cent in 2020-21 to 3.7 per cent in 2021-22. Of the 20 large states analysed by Business Standard, eight are still expected to have a higher than 4 per cent fiscal deficit in 2021-22 as per their budget estimates (chart 1).
Not just states, even local bodies are reporting stress due to the pandemic. A survey of 221 municipal corporations conducted by the RBI showed that 70.4 per cent witnessed a decline in revenues, whereas expenditures increased for 71.2 per cent of corporations. Nearly a third reported repurposing of expenditure towards Covid response, and only 2.4 per cent reported no fiscal problems (chart 3). Analysis of data of 20 municipal corporations showed that revenue surplus dipped by 38 per cent during the pandemic (chart 4).
StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines
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