Debt to gdp ratio of indian states

The COVID-19 pandemic wreaked havoc across the world and brought the global and India economy to a screeching halt. The impact of the pandemic in disrupting the finances of the country and the states is visible in the form of high level of debts of both. Recently, the Reserve Bank of India (RBI), in its report titled 'State Finances: A Study of Budgets of 2021-22', raised concerns about the worrying level of debt and debt to GDP ratio of states. According to the report, the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022, which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. However, the 15th Finance Commission expects the debt-GDP ratio to peak at 33.3 per cent in 2022-23, and gradually decline thereafter to reach 32.5 per cent by 2025-26. As per an analysis by CRISIL Ratings of the top 18 states of India on the basis of Gross State Domestic Product (GSDP), Rajasthan (with total debt of Rs 4.9 lakh crore), Punjab (Rs 2.7 lakh crore), Uttar Pradesh (Rs 8.1 lakh crore), Andhra Pradesh (Rs 4.5 lakh crore) and Kerala (Rs 3.3 lakh crore) are among the most indebted states in the country. Despite the recovery being witnessed after the second wave of infections, experts believes that the chances of improvement in the debt levels of states are bleak. A projection for a sample of 12 large state governments by credit rating agency ICRA said that the combined debt stock of all the 12 states would rise to 26.5...

States' debt-to-GDP ratio is expected to remain at 31 per cent by the end of the current fiscal, which is higher than the 20 per cent target which is to be achieved by the next fiscal, i.e. 2022-23. This was reported by the Reserve Bank of India (RBI) in its annual publication on states' budgets of 2021-22. The combined debt-to-GDP ratio staying higher than the 20 per cent target earmarked for the next fiscal, is a worrisome trend, the report noted. The central bank noted in the report that as the impact of the second wave of the Coronavirus pandemic subsides, state governments need to take credible steps to address debt sustainability concerns. “The combined debt to GDP ratio of states which stood at 31 per cent at end-March 2021 and is expected to remain at that level by end-March 2022, is worryingly higher than the target of 20 per cent to be achieved by 2022-23, as per the recommendations of the FRBM review committee,” it said. The RBI further observed that the budgeted consolidated gross fiscal deficit (GFD) of 3.7 per cent of GDP for states for the year 2021-22 was lower than the 4 per cent level recommended by the 15th Finance Commission. This, it said, reflected the state governments' intent towards fiscal consolidation. According to the report, in the medium term, improvements in the fiscal position of state governments will be contingent upon reforms in the power sector as recommended by Finance Commission and specified by the Centre like creating transparent and...

The Reserve Bank of India (RBI) has projected a decrease in the collective debt of Indian states as a percentage of GDP for the fiscal year 2022-23, according to an IANS report. However, Uttar Pradesh's debt burden is expected to rise significantly, reaching approximately Rs 7.84 trillion in the next fiscal year. According to the annual budget of Uttar Pradesh, the Gross State Domestic Product (GSDP) is estimated to be Rs 24.39 trillion in 2023-24. The IANS report added that the projected public debt of Rs 7.84 trillion exceeds the state's annual budget of Rs 6.90 trillion by nearly Rs 94,000 crore or around 14 per cent. Uttar Pradesh does not rank among the top indebted states in India, the state witnessed its public debt ratio surpass 30 per cent of the GSDP during the pandemic years due to challenging economic conditions and subdued tax collection. According to an IANS report, this was a widespread phenomenon globally and across India following the impact of the pandemic. A senior official in the state finance department noted that while Uttar Pradesh had successfully maintained the public debt ratio below 30 per cent until 2020-21, it increased to 33.4 per cent and 34.2 per cent during the revised estimates for the fiscal years 2021-22 and 2022-23, respectively, due to the pandemic. Chief Minister Yogi Adityanath stated that the Uttar Pradesh budget of Rs 6.90 trillion aimed to lay the foundation for the ambitious goal of the state becoming a trillion-dollar economy by...

In 2019-20, states are expected to spend 64% more than the central government, a significant change from 46% in 2014-15. Hence, states are assuming greater responsibility in governmental spending in the country. States primarily rely on three sources for financing this expenditure: (i) own resources (44%), (ii) transfers from the central government (35%), and (iii) borrowings (21%). Own resources of states have undergone a major shift since 2017 with the implementation of GST, under which states transferred a major part of their taxation powers to the GST Council. With 2019-20 being the last year of the 14 th Finance Commission period, the Terms of Reference of the 15 th Finance Commission and its recommendations will direct a major share of states’ revenue (35% during 2015-20) during the six-year period 2020-26. With such uncertainties surrounding revenue, states borrow to maintain their expenditure, subject to the limits as per their FRBM laws. These limits on borrowings combined with revenue shortfall and large one-time expenditure programmes (e.g. farm loan waivers and UDAY) are leading to states cutting their planned expenditure. In this context, we look at recent developments that affect state finances and the trends in various components of state finances, i.e., receipts, expenditure, debt, and deficit. This report is based on the data compiled from budget documents of the states for the last ten years. This report covers 27 of the 28 states (except Manipur), erstwh...

In debt-to-GDP ratio is the It should not be confused with a deficit-to-GDP ratio, which, for countries running budget deficits, measures a country's annual net fiscal loss in a given year ( surplus-to-GDP ratio measures a country's annual net fiscal gain as a share of that country's GDP. Particularly in The debt-to-GDP ratio is technically not a Changes [ ] The change in debt-to-GDP is approximately "net change in debt as percentage of GDP"; [ dubious – [ dubious – This is only approximate as GDP changes from year to year, but generally, year-on-year GDP changes are small (say, 3%), [ citation needed] and thus this is approximately correct. [ dubious – However, in the presence of significant [ citation needed] A government's debt-to-GDP ratio can be analysed by looking at how it changes or, in other words, how the debt is evolving over time: B t Y t − B t − 1 Y t − 1 = ( r − g ) ( B t − 1 Y t − 1 ) + ( G t − T t Y t ) shows the primary deficit-to-GDP ratio. If the government has the ability to ( B t Y t − B t − 1 Y t − 1 ) + ( M t Y t − M t − 1 Y t − 1 ) = ( r − g ) ( B t − 1 Y t − 1 ) + ( G t − T t Y t ) is the change in money balances (i.e. money growth). By printing money the government is able to increase nominal money balances to pay off the debt (consequently acting in the debt way that debt financing does, in order to balance the government's expenditures). [ clarification needed] However, the effect that an increase in nominal money balances has on Applications ...

In debt-to-GDP ratio is the It should not be confused with a deficit-to-GDP ratio, which, for countries running budget deficits, measures a country's annual net fiscal loss in a given year ( surplus-to-GDP ratio measures a country's annual net fiscal gain as a share of that country's GDP. Particularly in The debt-to-GDP ratio is technically not a Changes [ ] The change in debt-to-GDP is approximately "net change in debt as percentage of GDP"; [ dubious – [ dubious – This is only approximate as GDP changes from year to year, but generally, year-on-year GDP changes are small (say, 3%), [ citation needed] and thus this is approximately correct. [ dubious – However, in the presence of significant [ citation needed] A government's debt-to-GDP ratio can be analysed by looking at how it changes or, in other words, how the debt is evolving over time: B t Y t − B t − 1 Y t − 1 = ( r − g ) ( B t − 1 Y t − 1 ) + ( G t − T t Y t ) shows the primary deficit-to-GDP ratio. If the government has the ability to ( B t Y t − B t − 1 Y t − 1 ) + ( M t Y t − M t − 1 Y t − 1 ) = ( r − g ) ( B t − 1 Y t − 1 ) + ( G t − T t Y t ) is the change in money balances (i.e. money growth). By printing money the government is able to increase nominal money balances to pay off the debt (consequently acting in the debt way that debt financing does, in order to balance the government's expenditures). [ clarification needed] However, the effect that an increase in nominal money balances has on Applications ...

The Reserve Bank of India (RBI) has projected a decrease in the collective debt of Indian states as a percentage of GDP for the fiscal year 2022-23, according to an IANS report. However, Uttar Pradesh's debt burden is expected to rise significantly, reaching approximately Rs 7.84 trillion in the next fiscal year. According to the annual budget of Uttar Pradesh, the Gross State Domestic Product (GSDP) is estimated to be Rs 24.39 trillion in 2023-24. The IANS report added that the projected public debt of Rs 7.84 trillion exceeds the state's annual budget of Rs 6.90 trillion by nearly Rs 94,000 crore or around 14 per cent. Uttar Pradesh does not rank among the top indebted states in India, the state witnessed its public debt ratio surpass 30 per cent of the GSDP during the pandemic years due to challenging economic conditions and subdued tax collection. According to an IANS report, this was a widespread phenomenon globally and across India following the impact of the pandemic. A senior official in the state finance department noted that while Uttar Pradesh had successfully maintained the public debt ratio below 30 per cent until 2020-21, it increased to 33.4 per cent and 34.2 per cent during the revised estimates for the fiscal years 2021-22 and 2022-23, respectively, due to the pandemic. Chief Minister Yogi Adityanath stated that the Uttar Pradesh budget of Rs 6.90 trillion aimed to lay the foundation for the ambitious goal of the state becoming a trillion-dollar economy by...

The COVID-19 pandemic wreaked havoc across the world and brought the global and India economy to a screeching halt. The impact of the pandemic in disrupting the finances of the country and the states is visible in the form of high level of debts of both. Recently, the Reserve Bank of India (RBI), in its report titled 'State Finances: A Study of Budgets of 2021-22', raised concerns about the worrying level of debt and debt to GDP ratio of states. According to the report, the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022, which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. However, the 15th Finance Commission expects the debt-GDP ratio to peak at 33.3 per cent in 2022-23, and gradually decline thereafter to reach 32.5 per cent by 2025-26. As per an analysis by CRISIL Ratings of the top 18 states of India on the basis of Gross State Domestic Product (GSDP), Rajasthan (with total debt of Rs 4.9 lakh crore), Punjab (Rs 2.7 lakh crore), Uttar Pradesh (Rs 8.1 lakh crore), Andhra Pradesh (Rs 4.5 lakh crore) and Kerala (Rs 3.3 lakh crore) are among the most indebted states in the country. Despite the recovery being witnessed after the second wave of infections, experts believes that the chances of improvement in the debt levels of states are bleak. A projection for a sample of 12 large state governments by credit rating agency ICRA said that the combined debt stock of all the 12 states would rise to 26.5...

In 2019-20, states are expected to spend 64% more than the central government, a significant change from 46% in 2014-15. Hence, states are assuming greater responsibility in governmental spending in the country. States primarily rely on three sources for financing this expenditure: (i) own resources (44%), (ii) transfers from the central government (35%), and (iii) borrowings (21%). Own resources of states have undergone a major shift since 2017 with the implementation of GST, under which states transferred a major part of their taxation powers to the GST Council. With 2019-20 being the last year of the 14 th Finance Commission period, the Terms of Reference of the 15 th Finance Commission and its recommendations will direct a major share of states’ revenue (35% during 2015-20) during the six-year period 2020-26. With such uncertainties surrounding revenue, states borrow to maintain their expenditure, subject to the limits as per their FRBM laws. These limits on borrowings combined with revenue shortfall and large one-time expenditure programmes (e.g. farm loan waivers and UDAY) are leading to states cutting their planned expenditure. In this context, we look at recent developments that affect state finances and the trends in various components of state finances, i.e., receipts, expenditure, debt, and deficit. This report is based on the data compiled from budget documents of the states for the last ten years. This report covers 27 of the 28 states (except Manipur), erstwh...

States' debt-to-GDP ratio is expected to remain at 31 per cent by the end of the current fiscal, which is higher than the 20 per cent target which is to be achieved by the next fiscal, i.e. 2022-23. This was reported by the Reserve Bank of India (RBI) in its annual publication on states' budgets of 2021-22. The combined debt-to-GDP ratio staying higher than the 20 per cent target earmarked for the next fiscal, is a worrisome trend, the report noted. The central bank noted in the report that as the impact of the second wave of the Coronavirus pandemic subsides, state governments need to take credible steps to address debt sustainability concerns. “The combined debt to GDP ratio of states which stood at 31 per cent at end-March 2021 and is expected to remain at that level by end-March 2022, is worryingly higher than the target of 20 per cent to be achieved by 2022-23, as per the recommendations of the FRBM review committee,” it said. The RBI further observed that the budgeted consolidated gross fiscal deficit (GFD) of 3.7 per cent of GDP for states for the year 2021-22 was lower than the 4 per cent level recommended by the 15th Finance Commission. This, it said, reflected the state governments' intent towards fiscal consolidation. According to the report, in the medium term, improvements in the fiscal position of state governments will be contingent upon reforms in the power sector as recommended by Finance Commission and specified by the Centre like creating transparent and...