The combined fiscal position of India’s states is likely to improve in fiscal 2017-18, an RBI report said on Friday. The central bank noted that the increase in the debt burden of the states in recent years, notwithstanding, the overall fiscal position is found to be sustainable in the long run.
The ratio of states’ gross fiscal deficit (GFD) to gross state domestic product (GSDP) is budgeted at 2.6 per cent for 2017-18, according to data available for 25 states. This is lower than the 3.4 per cent in 2016-17 as per revised estimates, the central bank said. The number is also lower than the centre’s fiscal deficit target of 3.2 per cent for 2017-18.