Plan panel warns State Govts

quot;Fiscal situation of states has deteriorated considerably in the past few years, particularly so in the last two yearsquot;, he said adding that states had resorted to borrowings heavily to meet their revenue expenditure that had out paced their earnings resulting in a high-level of interest liability.

Pant, who is undertaking mid-year review of the Ninth Five Year Plan 1997-2002, regretted that growing trend of offering tax concessions particularly sales tax for attracting greater investment was actually hurting the states.