Covid impact: India's combined fiscal gap to reach 12.7% in FY21, says SBI

India’s combined federal and states’ budget gap in the current fiscal year will reach 12.7% on increased healthcare spending and a collapse in revenues amid the pandemic, according to an analysis by SBI.

State Bank of India said in a report published Wednesday that there was a sharp increase in debt in the year to March 31 as states had to borrow more given their lack of resources, with the average fiscal deficit across 13 states reaching 4.5% of gross domestic product.

“Indian states have been at the forefront in the fight against Covid-19, but the impact of a collapse