Pension bills of states cut into municipal budget in the time of Covid

An RBI analysis showed that during the second wave, 22% of municipalities reported revenue loss of an alarming 50% and more

More than anything else, each state government in India has become a pension paying organisation. Towering above all expenditures on education, on health and of course on any economic services, the single largest expenditure states incur is on pensions. The biggest impact of this spike could be on the discretionary money the states pay to municipal corporations and panchayats. From vaccination to hospitalisation, these bodies are, however, the bulwark against Covid. 

While the ballooning pension bill also has huge significance for states trying to cut their fiscal deficit and yet reorient their expenditure towards development, as an RBI study on