Driving up liabilities

Populism takes hold in state budgets

While the Union Budget is extensively analysed after it is presented, examination of state government budgets tends to be less visible. This is in spite of the fact that state government decisions about expenditure and revenue are no less consequential for the general government deficit and the overall fiscal space. The recent trends have been clear. State governments till 2017-18 were broadly increasing their deficits as a percentage of gross domestic product (GDP), while the Union was reducing its corresponding ratio as required by the announced path of fiscal consolidation. However, an analysis of the state budgets presented for 2018-19