Gross fiscal deficit improves

RBI report on state finances during the financial year 2003-04

The Reserve Bank of India today said gross fiscal deficit of 4.2 per cent (budget estimate for 2003-04) as a proportion of gross domestic product is an improvement, albeit a marginal one, over the previous year's 4.7 per cent.

The outstanding liabilities of states' as a percentage of GDP at current market prices is pegged at 28.8 per cent in 2003-04 as against 27.9 per cent in 2003-04.

The financing pattern of the GFD indicates that the small savings receipts (special securities issued to National Small Savings Fund) would continue to contribute a major share in 2003-04.

The budgeted gross fiscal deficit for 2003-04 is pegged at Rs 1,16,175.30 crore (Rs 1,16,635.60 crore in 2002-03 "" revised estimate).

As per the budget estimates for 2003-04, the share of the small savings receipts, loans from banks and financial institutions and state provident funds in financing the GFD would be higher.

On the higher hand, the share of market borrowings and loans from the Centre in financing the states' GFD is budgeted to decline in 2003-04 from the previous year.

A break-up of the financing pattern of states' GFD shows that 43.2 per cent (Rs 50,195.90 crore) will be accounted for by special securities issued to NSSF as against 42.1 per cent (Rs 49,068.40 crore in 2002-03).