Key Points
A rise in balance sheet borrowings and guarantees to power and irrigation sector entities is likely to keep state indebtedness high at 31-32%, said Crisil in its latest report Friday...
The rating agency noted that overall borrowings of 18 states, which constitute 90% of the countrys gross state domestic product, is likely to increase by 9% to over Rs 87 lakh crore in FY24 compared with Rs 79.5 lakh crore in FY23...
This, coupled with the 18-20%3 on-year increase in capital outlays of states (~2.3% of GSDP) on key infrastructure segments such as water supply & sanitation, urban development, roads, and irrigation, will necessitate higher borrowings this fiscal, too, said Anuj Sethi, senior director, Crisil Ratings...
States, however, will be able to meet their fiscal deficit target, with Crisil projecting that at 2.5% of GSDP, the gross fiscal deficit will remain below the 3% Fiscal Responsibility and Budget Management Act mark...
Better-than-expected tax buoyancy or support from the centre in the form of higher grants could provide further liquidity buffer to states, Crisil said.. (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)..
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