The consolidated budgetary position of the States for 2011-12 reflected the States’ commitment to carry forward
fiscal correction as evident from the emergence of surplus in the consolidated revenue account after a gap of two
years and a consequent reduction in the fiscal deficit-GDP ratio. While expecting a moderation in revenue
growth, the States have budgeted for deceleration in aggregate expenditure growth reflecting their stance of
controlling committed expenditures during 2011-12. The envisaged fiscal deficit-GDP ratio for 2011-12 is,
however, higher than the Thirteenth Finance Commission’s annual path, mainly on account of higher capital
outlay.
1. Introduction
4.1 The consolidated fiscal position of the States,
which had deteriorated in 2008-09 and 2009-10,
following discretionary fiscal stimulus measures
undertaken to revive the sluggish economy in the
aftermath of the global crisis, showed improvement in
2010-11, indicating a resumption of the fiscal
consolidation path. The States proposed to carry
forward the fiscal consolidation process in 2011-12 in
keeping with the recommendation of the Thirteenth
Finance Commission (ThFC). If the fiscal outcome
remains in line with the budgeted expectations, the
fiscal deficit-GDP ratio for 2011-12 could turn out to be
lower than that prevailing during the pre-crisis rulebound
fiscal consolidation phase (2004-08) (Table
IV.1, Appendix Table 1).
2. Accounts: 2009-10
4.2 The fiscal position of the States in terms of key
deficit indicators had deteriorated during 2009-10 over
the previous year, leading to the re-surfacing of
revenue deficit after a three-year gap. A sharp
increase in committed expenditure on account of pay/
pension revisions and arrear payments under the
Sixth Pay Commission award had primarily
contributed to the fiscal expansion. The extent of fiscal
deterioration, however, turned out to be much less and
the fiscal outcome of the States at the consolidated
level showed marked improvement when the revised
estimates for 2009-10 translated into accounts.
Lower-than-anticipated revenue expenditure more
than offset the shortfall in revenue receipts, resulting in
a 0.2 percentage point reduction in the consolidated revenue deficit to GDP ratio in 2009-10 vis-à-vis the
revised estimates for the year.
Table IV.1: Major Deficit Indicators of State Governments |
(Amount in ` billion) |
Item |
1990-98 |
1998-2004 |
2004-08 |
2008-09 |
2009-10 |
2010-11
(BE) |
2010-11
(RE) |
2011-12
(BE) |
Average (Percent of GDP) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
Gross Fiscal Deficit |
2.8 |
4.3 |
2.3 |
1346 |
1888 |
1985 |
2,067 |
1977 |
|
|
|
(2.4) |
(2.9) |
(2.6) |
(2.7) |
(2.2) |
Revenue Deficit |
0.8 |
2.5 |
0.0 |
-127 |
310 |
244 |
252 |
-197 |
|
|
|
(-0.2) |
(0.5) |
(0.3) |
(0.3) |
(-0.2) |
| Primary Deficit |
1.0 |
1.7 |
0.0 |
316 |
760 |
699 |
797 |
576 |
| |
|
|
(0.6) |
(1.2) |
(0.9) |
(1.0) |
(0.6) |
BE: Budget Estimates. RE: Revised Estimates.
Notes : 1. Negative (-) sign indicates surplus.
2. Figures in parentheses are percentages to GDP.
3. The ratios to GDP at current market prices from 2004-05 are based on CSO’s National Accounts 2004-05 series. Data on GDP for earlier
years relate to 1999-2000 series.
Source: Budget Documents of the State Governments. |
4.3 The reduction in revenue expenditure in
2009-10 (Accounts) over 2009-10(RE) was seen in
both the development and non-development
components (Table IV.2). All major categories of
development revenue expenditure registered decline
over the respective revised estimates. Within nondevelopment
expenditure, the reduction in committed expenditure (comprising administrative
services, pension and interest payments) contributed
to over 72 per cent of the overall reduction in non-development
expenditure in 2009-10 (Accounts)
over 2009-10(RE).
4.4 Revenue receipts during 2009-10 (Accounts)
were lower than the revised estimates mainly on
account of a sharp decline in grants from the Centre
which contributed to over two-thirds of the total decline in revenue receipts. States’ own revenue (both tax and
non-tax) as well as transfers from the Centre were also
lower than was anticipated in the revised estimates.
While States’ own tax revenue was mainly affected by
a sharp reduction in sales tax collections due to the
slowdown in economic activity, the decline in States’
own non-tax revenue reflected mainly lower
realisation under interest receipts.
Table IV.2: Variation in Major Items - 2009-10 (Accounts) over 2009-10 (RE) |
(Amount in ` billion) |
Item |
2009-10
(RE) |
2009-10
(Accounts) |
Variation |
Share in variation*
(Percent) |
Amount |
Percent |
1 |
2 |
3 |
4 |
5 |
6 |
I. |
Revenue Receipts (i+ii) |
8,073.9 |
7,681.4 |
-392.5 |
-4.9 |
100.0 |
| |
(i) Tax Revenue (a+b) |
5,310.0 |
5,280.8 |
-29.3 |
-0.6 |
7.5 |
| |
(a) Own Tax Revenue |
3,655.3 |
3,630.6 |
-24.7 |
-0.7 |
6.3 |
| |
of which: Sales Tax |
2,252.3 |
2,206.4 |
-45.8 |
-2.0 |
11.7 |
| |
(b) Share in Central Taxes |
1,654.8 |
1,650.1 |
-4.7 |
-0.3 |
1.2 |
| |
(ii) Non-Tax Revenue |
2,763.8 |
2,400.6 |
-363.2 |
-13.1 |
92.5 |
| |
(a) States’ Own Non-Tax Revenue |
971.8 |
890.9 |
-80.9 |
-8.3 |
20.6 |
| |
(b) Grants from Centre |
1,792.1 |
1,509.7 |
-282.3 |
-15.8 |
71.9 |
II. |
Revenue Expenditure |
8,540.5 |
7,991.5 |
-549.0 |
-6.4 |
100.0 |
|
of which: |
|
|
|
|
|
|
(i) Development Expenditure |
5,159.3 |
4,771.8 |
-387.5 |
-7.5 |
70.6 |
|
of which: |
|
|
|
|
|
|
Education, Sports, Art and Culture |
1,615.2 |
1,516.7 |
-98.5 |
-6.1 |
17.9 |
|
Transport and Communications |
225.2 |
215.9 |
-9.3 |
-4.5 |
1.7 |
|
Power |
342.5 |
313.3 |
-29.2 |
-8.5 |
5.3 |
|
Relief on account of Natural Calamities |
103.8 |
84.1 |
-19.7 |
-19.0 |
3.6 |
|
Rural Development |
296.4 |
288.3 |
-8.1 |
-2.7 |
1.5 |
|
(ii) Non-Development Expenditure |
3,165.0 |
3,013.9 |
-151.1 |
-4.8 |
27.5 |
|
of which: |
|
|
|
|
|
|
Administrative Services |
712.5 |
675.0 |
-37.5 |
-5.3 |
6.8 |
|
Pension |
872.7 |
831.6 |
-41.1 |
-4.7 |
7.5 |
|
Interest Payments |
1,159.0 |
1,128.1 |
-31.0 |
-2.7 |
5.6 |
III. |
Capital Receipts |
2,373.6 |
2,395.0 |
21.4 |
0.9 |
100.0 |
|
of which: |
|
|
|
|
|
|
Non-Debt Capital Receipts |
3.61 |
8.12 |
4.5 |
125.2 |
21.1 |
IV. |
Capital Expenditure |
2,265.8 |
2,161.8 |
-104.0 |
-4.6 |
100.0 |
|
of which: |
|
|
|
|
|
|
Capital Outlay |
1,604.1 |
1,492.1 |
-111.9 |
-7.0 |
107.6 |
|
of which: |
|
|
|
|
|
|
Capital Outlay on Irrigation and Flood Control |
473.5 |
414.5 |
-59.0 |
-12.5 |
56.7 |
|
Capital Outlay on Energy |
177.1 |
171.7 |
-5.4 |
-3.0 |
5.2 |
|
Capital Outlay on Transport |
320.6 |
312.8 |
-7.8 |
-2.4 |
7.5 |
|
Memo Item: |
|
Revenue Deficit |
466.6 |
310.2 |
-156.5 |
-33.5 |
|
|
Gross Fiscal Deficit |
2,161.0 |
1888.2 |
-272.8 |
-12.6 |
|
|
Primary Deficit |
1,002.0 |
760.1 |
-241.9 |
-24.1 |
|
RE: Revised Estimates. * : Denotes percentage share in relevant total.
Note:1. Negative (-) sign in deficit indicators indicates surplus.
2. Capital receipts include public accounts on a net basis while capital expenditure excludes public accounts.
3. Also see Notes to Appendices. |
4.5 The lower-than-anticipated revenue deficit
together with a decline in capital outlay resulted in a
reduction of 0.4 percentage point in the gross fiscal
deficit (GFD)-GDP ratio in 2009-10 (Accounts) over
the revised estimates. Consequently, the primary
deficit of the States was also contained in 2009-10
(Accounts) as compared with 2009-10 (RE).
3. Revised Estimates: 2010-11
4.6 The strengthening of the growth momentum in
2010-11 boosted revenues and improved the
consolidated fiscal position of the States, as evident
from the reduction in the key deficit-GDP ratios over
the previous year. The growth in revenue receipts in
2010-11 (RE) over 2009-10 (Accounts) more than
offset the increase in revenue expenditure, which,
together with a sharp increase in GDP, resulted in a
narrowing of the revenue deficit - GDP (RD-GDP) ratio
by 0.2 percentage point over the preceding year. The
RD-GDP ratio in 2010-11 (RE), however, remained
unchanged over the budget estimates for the year.
The GFD-GDP ratio in 2010-11 (RE) was higher by 0.1
percentage point over the budget estimates, mainly on
account of an increase in capital outlay.
4.7 Revenue receipts in 2010-11 (RE) were
higher than the budget estimates for the year on
account of higher States’ own tax revenue (OTR) as
well as Central transfers to States. States’ OTR in
2010-11 (RE) exceeded the budgeted levels mainly
on account of higher collections from sales tax,
stamp and registration fees, taxes and duties on
electricity, state excise and taxes on vehicles. States
also benefited from increased buoyancy in the
Centre’s gross tax revenues and enhancement in the
States’ share in shareable central taxes in accordance with the ThFC’s recommendation. Nontax
revenue of the States was higher in 2010-11 (RE)
due to higher grants from the Centre. The States' own
non-tax revenue (ONTR) was, however, lower,
mainly on account of lower receipts from ‘state
lotteries’, 'urban development', and ‘dividends of
State Public Sector Undertakings (PSUs)’.
4.8 Revenue expenditures in the revised estimates
of 2010-11 were higher than the budget estimates,
mainly on account of higher development expenditure,
with social services contributing to over 52 per cent of
the increase in total revenue expenditure. ‘Education,
sports, art and culture’ and ‘relief on account of natural
calamities’ were the major contributors to the increase
in expenditure on social services; the increase in
expenditure on economic services was led by ‘power’
and ‘transportation and communications.’ Nondevelopment
revenue expenditure was also higher in
2010-11 (RE) than in 2010-11 (BE) on account of higher
pension outgo, which more than offset the decline in
expenditure on administrative services and interest
payments (Table IV.3).
4.9 GFD at the consolidated level was higher in
2010-11 (RE) than in 2010-11 (BE) on account of
higher than budgeted capital outlay, particularly in
‘energy’ and ‘transportation’; higher ‘net lending of the
States’; and lower realisation of disinvestment
proceeds than the budgeted level.
4. Budget Estimates : 2011-12
Key Deficit Indicators
4.10 The consolidated revenue account of the
States is budgeted to record surplus in 2011-12,
indicative of the return to the fiscal consolidation path
as envisaged by the ThFC. The improvement in the
revenue account is expected to not only provide the
necessary resource for increased capital outlay but
also enable a reduction in the GFD-GDP ratio by 0.5
percentage point in 2011-12 (BE) over 2010-11 (RE). In
line with the budgeted decline in the GFD-GDP ratio,
there is a reduction of 0.4 percentage point in the
budgeted primary deficit, which bodes well for the
long-run sustainability of State finances.
Table IV.3: Variation in Major Items - 2010-11 (RE) over 2010-11 (BE) |
(Amount in ` billion) |
Item |
2010-11
(BE) |
2010-11
(RE) |
Variation |
Share in variation*
(Percent) |
Amount |
Percent |
1 |
2 |
3 |
4 |
5 |
6 |
I. |
Revenue Receipts (i+ii) |
9,130.4 |
9,680.7 |
550.3 |
6.0 |
100.0 |
|
(i) Tax Revenue (a+b) |
6,271.5 |
6,734.2 |
462.7 |
7.4 |
84.1 |
|
(a) Own Tax Revenue |
4,266.8 |
4,582.7 |
315.9 |
7.4 |
57.4 |
|
of which: Sales Tax |
2,648.5 |
2,819.3 |
170.8 |
6.4 |
31.0 |
|
(b) Share in Central Taxes |
2,00,4.7 |
2,151.5 |
146.8 |
7.3 |
26.7 |
|
(ii) Non-Tax Revenue |
2,858.9 |
2,946.5 |
87.6 |
3.1 |
15.9 |
|
(a) States’ Own Non-Tax Revenue |
1,026.1 |
979.0 |
-47.1 |
-4.6 |
-8.6 |
|
(b) Grants from Centre |
1,832.8 |
1,967.5 |
134.7 |
7.4 |
24.5 |
II. |
Revenue Expenditure |
9,374.1 |
9,932.5 |
558.4 |
6.0 |
100.0 |
|
of which: |
|
|
|
|
|
|
(i) Development Expenditure |
5,597.1 |
6,066.1 |
469.0 |
8.4 |
84.0 |
|
of which: |
|
|
|
|
|
|
Education, Sports, Art and Culture |
1,847.5 |
1,976.8 |
129.3 |
7.0 |
23.1 |
|
Transport and Communication |
208.2 |
239.6 |
31.5 |
15.1 |
5.6 |
|
Power |
333.1 |
369.8 |
36.8 |
11.0 |
6.6 |
|
Relief on account of Natural Calamities |
53.2 |
119.6 |
66.4 |
124.8 |
11.9 |
|
Rural Development |
335.0 |
356.3 |
21.3 |
6.4 |
3.8 |
|
(ii) Non-Development Expenditure |
3,514.8 |
3,590.8 |
76.1 |
2.2 |
13.6 |
|
of which: |
|
|
|
|
|
|
Administrative Services |
831.9 |
803.9 |
-28.0 |
-3.4 |
-5.0 |
|
Pension |
950.2 |
1,065.7 |
115.5 |
12.2 |
20.7 |
|
Interest Payments |
1,286.6 |
1,269.5 |
-17.1 |
-1.3 |
-3.1 |
III. |
Capital Receipts |
2,428.6 |
2366.0 |
-62.6 |
-2.6 |
100.0 |
|
of which: |
|
|
|
|
|
|
Non-Debt Capital Receipts |
31.6 |
9.6 |
-22.0 |
-69.7 |
35.1 |
IV. |
Capital Expenditure |
2,371.8 |
2431.0 |
59.3 |
2.5 |
100.0 |
|
of which: |
|
|
|
|
|
|
Capital Outlay |
1,667.0 |
1704.0 |
37.0 |
2.2 |
62.4 |
|
of which: |
|
|
|
|
|
|
Capital Outlay on Irrigation and Flood Control |
492.7 |
459.7 |
-33.0 |
-6.7 |
-55.7 |
|
Capital Outlay on Energy |
145.3 |
168.4 |
23.1 |
15.9 |
39.0 |
|
Capital Outlay on Transport |
324.2 |
343.1 |
19.5 |
6.0 |
32.0 |
|
Memo Item: |
|
Revenue Deficit |
243.7 |
251.8 |
8.1 |
3.3 |
|
|
Gross Fiscal Deficit |
1,985.4 |
2,066.7 |
81.3 |
4.1 |
|
|
Primary Deficit |
698.8 |
797.2 |
98.4 |
14.1 |
|
BE: Budget Estimates. RE: Revised Estimates. *: Denotes percentage share in relevant total.
Note: See Notes to Table IV.2.
Source: Budget Documents of the State Governments. |
Revenue Receipts
4.11 The consolidated States’ OTR as well as tax
devolution from the Centre are, however, budgeted to
decelerate during 2011-12 from their high growth rates
of the previous year. Growth in non-tax revenue is also
budgeted to decelerate in 2011-12(BE) as compared
with 2010-11(RE), primarily on account of a significant
moderation in the growth of grants from the Centre (Table IV.4 and Appendix Tables 2 & 3). Barring
receipts from the transport sub-sector, all other ONTR
of the States are budgeted to grow at a slower pace in
2011-12 than the previous year.
4.12 Revenue receipts-GDP ratio is, budgeted to
remain unchanged in 2011-12 despite a marginal
increase in the ratio of tax devolution from the Centre-
GDP9. On the non-tax revenue front, while States’ ONTR-GDP ratio is budgeted to marginally decline
due to fall in interest receipts, grants from Centre-GDP
ratio is expected to remain stable at the previous
year’s level (Chart IV.1, Table IV.5 and Appendix Table 3).
Table IV.4: Variation in Major Items - 2011-12 (BE) over 2010-11 (RE) |
(Amount in ` billion) |
Item |
2010-11
(RE) |
2011-12
(BE) |
Variation |
Share in variation*
(Percent) |
Amount |
Percent |
1 |
2 |
3 |
4 |
5 |
6 |
I. |
Revenue Receipts (i+ii) |
9,680.7 |
11,218.4 |
1,537.7 |
15.9 |
100.0 |
| |
(i) Tax Revenue (a+b) |
6,734.2 |
7,904.8 |
1,170.6 |
17.4 |
76.1 |
| |
(a) Own Tax Revenue |
4,582.7 |
5,395.9 |
813.1 |
17.7 |
52.9 |
| |
of which: Sales Tax |
2,819.3 |
3,340.3 |
521.0 |
18.5 |
33.9 |
| |
(b) Share in Central Taxes |
2,151.5 |
2,508.9 |
357.5 |
16.6 |
23.2 |
| |
(ii) Non-Tax Revenue |
2,946.5 |
3,313.7 |
367.2 |
12.5 |
23.9 |
| |
(a) States’ Own Non-Tax Revenue |
979.0 |
1,026.2 |
47.2 |
4.8 |
3.1 |
| |
(b) Grants from Centre |
1,967.5 |
2,287.5 |
319.9 |
16.3 |
20.8 |
II. |
Revenue Expenditure |
9,932.5 |
11,021.4 |
1,088.9 |
11.0 |
100.0 |
| |
of which: |
|
|
|
|
|
| |
(i) Development Expenditure |
6,066.1 |
6,680.0 |
613.9 |
10.1 |
56.4 |
| |
of which: |
|
|
|
|
|
| |
Education, Sports, Art and Culture |
1,976.8 |
2,254.4 |
277.6 |
14.0 |
25.5 |
| |
Transport and Communications |
239.6 |
259.4 |
19.8 |
8.3 |
1.8 |
| |
Power |
369.8 |
380.2 |
10.4 |
2.8 |
1.0 |
| |
Relief on account of Natural Calamities |
119.7 |
81.3 |
-38.3 |
-32.0 |
-3.5 |
| |
Rural Development |
356.3 |
407.2 |
50.9 |
14.3 |
4.7 |
| |
(ii) Non-Development Expenditure |
3,590.8 |
4,019.1 |
428.3 |
11.9 |
39.3 |
| |
of which: |
|
|
|
|
|
| |
Administrative Services |
803.9 |
965.2 |
161.3 |
20.1 |
14.8 |
| |
Pension |
1,065.7 |
1,168.8 |
103.1 |
9.7 |
9.5 |
| |
Interest Payments |
1,269.5 |
1,401.3 |
131.8 |
10.4 |
12.1 |
III. |
Capital Receipts |
2,366.0 |
2,750.8 |
384.8 |
16.3 |
100.0 |
| |
of which: |
|
|
|
|
|
| |
Non-Debt Capital Receipts |
9.6 |
20.4 |
10.9 |
113.9 |
3.3 |
IV. |
Capital Expenditure |
2,431.0 |
2,876.0 |
445.0 |
18.3 |
100.0 |
| |
of which: |
|
|
|
|
|
| |
Capital Outlay |
1,704.0 |
2,027.5 |
323.5 |
19.0 |
72.7 |
| |
of which: |
|
|
|
|
|
| |
Capital Outlay on Irrigation and Flood Control |
459.7 |
583.6 |
124.0 |
27.0 |
27.9 |
| |
Capital Outlay on Energy |
168.4 |
162.7 |
-5.7 |
-3.4 |
-1.3 |
| |
Capital Outlay on Transport |
343.1 |
390.6 |
47.4 |
13.8 |
10.5 |
| |
Memo Item: |
| |
Revenue Deficit |
251.8 |
-197.0 |
-448.8 |
-178.2 |
|
| |
Gross Fiscal Deficit |
2,066.7 |
1,977.2 |
-89.5 |
-4.3 |
|
| |
Primary Deficit |
797.2 |
575.9 |
-221.3 |
-27.8 |
|
RE: Revised Estimates. BE: Budget Estimates.
*: Denotes percentage share in relevant total.
Note: See Notes to Table IV.2.
Source: Budget Documents of the State Governments. |
4.13 Among the non-tax resources of the States,
the cost recovery of public services has been an
important area of concern. While the cost recovery of
services10 had improved over the years, it is budgeted to decline in 2011-12(BE) for all important social and
economic services, with the exception of the road
sector (Table IV.6).
Expenditure Pattern
Revenue Expenditure
4.14 Fiscal correction of the States for 2011-12 has
been budgeted primarily based on controlling
revenue expenditure. The growth in consolidated revenue expenditure of the States is budgeted to
decelerate substantially in 2011-12(BE) as compared
with 2010-11(RE), on account of a deceleration in
both development and non-development
components. Within development revenue
expenditure, social services witnessed a sharper
deceleration than economic services. Non development
expenditure growth is budgeted to
decelerate in 2011-12 under all major categories,
barring economic services. Interest payments, which
accounts for over one-third of the non-development
revenue expenditure of States, is budgeted to show
lower growth in 2011-12. Committed expenditure as
a ratio of revenue receipts is, therefore, expected to
decline to 31.5 per cent in 2011-12(BE) from 32.4 per
cent in 2010-11(RE) (Chart IV.2, Table IV.7, Appendix
Table 4).
 |
Table IV.5: Aggregate Receipts of State Governments |
(Amount in ` billion) |
Item |
1990-98 |
1998-2004 |
2004-08 |
2008-09 |
2009-10 |
2010-11
(RE) |
2011-12
(BE) |
Variation
(Percent) |
(Average) |
Col.7/6 |
Col.8/7 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Aggregate Receipts (1+2) |
1,515.2 |
3,666.2 |
6,496.6 |
8,912.9 |
10,076.3 |
12,046.7 |
13,969.2 |
19.6 |
16.0 |
|
(15.5) |
(16.4) |
(16.1) |
(15.8) |
(15.6) |
(15.7) |
(15.7) |
|
|
1.Revenue Receipts (a+b) |
1,143.5 |
2,400.8 |
4,872.1 |
6,946.6 |
7,681.4 |
9,680.7 |
11,218.4 |
26.0 |
15.9 |
|
(11.6) |
(10.8) |
(11.9) |
(12.3) |
(11.9) |
(12.6) |
(12.6) |
|
|
a.States’Own Revenue (i+ii) |
696.2 |
1,501.2 |
2,921.1 |
4,036.8 |
4,521.5 |
5,561.7 |
6,422.1 |
23.0 |
15.5 |
|
(7.0) |
(6.7) |
(7.2) |
(7.2) |
(7.0) |
(7.2) |
(7.2) |
|
|
i. States’ Own Tax |
518.0 |
1,187.8 |
2,333.6 |
3,219.3 |
3,630.6 |
4,582.7 |
5,395.9 |
26.2 |
17.7 |
|
(5.2) |
(5.3) |
(5.7) |
(5.7) |
(5.6) |
(6.0) |
(6.1) |
|
|
ii.States’Own Non-Tax |
178.2 |
313.4 |
587.5 |
817.5 |
890.9 |
979.0 |
1,026.2 |
9.9 |
4.8 |
|
(1.8) |
(1.4) |
(1.4) |
(1.5) |
(1.4) |
(1.3) |
(1.2) |
|
|
b.Central Transfers (i+ii) |
447.3 |
899.6 |
1,951.0 |
2,909.8 |
3,159.9 |
41,19.0 |
4,796.4 |
30.4 |
16.4 |
|
(4.6) |
(4.0) |
(4.7) |
(5.2) |
(4.9) |
(5.4) |
(5.4) |
|
|
i. Shareable Taxes |
254.3 |
517.0 |
1,110.7 |
1,610.5 |
1,650.1 |
2,151.5 |
2,508.9 |
30.4 |
16.6 |
|
(2.6) |
(2.3) |
(2.7) |
(2.9) |
(2.6) |
(2.8) |
(2.8) |
|
|
ii. Grants-in Aid |
193.0 |
382.6 |
840.4 |
1,299.2 |
1,509.7 |
1,967.5 |
2,287.5 |
30.3 |
16.3 |
|
(2.0) |
(1.7) |
(2.0) |
(2.3) |
(2.3) |
(2.6) |
(2.6) |
|
|
2.Capital Receipts (a+b) |
371.8 |
1,265.4 |
1,624.5 |
1,966.3 |
2,395.0 |
2,366.0 |
2,750.8 |
-1.2 |
16.3 |
|
(3.8) |
(5.6) |
(4.2) |
(3.5) |
(3.7) |
(3.1) |
(3.1) |
|
|
a.Loans from Centre@ |
180.8 |
260.9 |
117.4 |
70.1 |
81.1 |
133.9 |
179.2 |
65.2 |
33.8 |
|
(1.9) |
(1.2) |
(0.3) |
(0.1) |
(0.1) |
(0.2) |
(0.2) |
|
|
b.Other Capital Receipts |
191.0 |
1,004.5 |
1,507.1 |
1,896.3 |
2,313.9 |
2,232.0 |
2,571.6 |
-3.5 |
15.2 |
|
(2.0) |
(4.4) |
(3.9) |
(3.4) |
(3.6) |
(2.9) |
(2.9) |
|
|
RE: Revised Estimates. BE: Budget Estimates.
@ With the change in the system of accounting with effect from 1999-2000, States’ share in small savings which was
earlier included under loans
from the Centre is included under internal debt and shown as special securities issued to
National Small Savings Fund (NSSF) of the Central
Government. The data for the years prior to 1999-2000 as reported
in this Table, therefore, exclude loans against small savings, for the purpose
of comparability.
Note: 1. The period averages provided in this table reflect the different fiscal phases of the States.
2. Figures in parentheses are percentages to GDP.
3. Capital Receipts include public accounts on a net basis. Also see Notes to Appendices.
Source: Budget documents of the State governments |
Table IV.6: Cost Recovery of Select Services |
(Ratio of Non-Tax Revenue to Non-Plan Revenue Expenditure) |
(Percent) |
|
2000-04 |
2004-08 |
2008-09 |
2009-10 |
2010-11
(RE) |
2011-12
(BE) |
Average |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
A. |
Social Services |
|
|
|
|
|
|
| |
of which: |
|
|
|
|
|
|
| |
(a) Education * |
1.5 |
2.6 |
2.7 |
3.7 |
4.1 |
3.8 |
| |
(b) Health ** |
5.2 |
5.2 |
6.8 |
3.7 |
4.2 |
4.1 |
B. |
Economic Services |
|
|
|
|
|
|
| |
of which: |
|
|
|
|
|
|
| |
(a) Irrigation # |
9.8 |
15.3 |
15.3 |
16.9 |
20.4 |
20.2 |
| |
(b) Power |
6.4 |
14.3 |
15.6 |
20.7 |
18.0 |
18.0 |
| |
(c) Roads @ |
18.3 |
10.1 |
5.8 |
5.9 |
6.7 |
7.3 |
RE: Revised Estimates. BE: Budget Estimates.
* : Also includes expenditure on sports, art and culture.
** : Includes expenditure on medical and public health, and family welfare.
# : Relates to irrigation and flood control for non-plan revenue expenditure while it pertains to major, medium and minor irrigation for non-tax
revenue.
@: Relates to roads and bridges for non-plan revenue expenditure while it pertains to road transport for non-tax revenue.
Note: Accounting in respect of power sector has not been uniform across the States which has, at times, resulted in adjustment across years.
Source: Compiled from the Budget documents of the State governments. |
Capital Expenditure
4.15 Capital expenditure is budgeted to grow at a
faster rate in 2011-12 mainly on account of
accelerated growth in capital outlay. While
development capital outlay is budgeted to record
higher growth in 2011-12(BE) than in the previous
year, non-development capital outlay is budgeted to
decelerate. Within development capital outlay, the
growth in ‘medical and public health’ under social
services and ‘major and medium irrigation’ under
economic services are budgeted to increase at a
faster rate than in 2010-11(RE). Loans and advances
by the States are budgeted to grow at a higher rate in
2011-12(BE) than in 2010-11(RE) mainly on account
of a sharp increase in loans for social services (Table
IV.7 and Appendix Table 6).
Development Expenditure
4.16 The pattern of aggregate expenditure of the
States in 2011-12(BE) shows a marginal decrease in
the share of development expenditure in total
expenditure. This is attributable to a decline in the share
of the revenue expenditure component, particularly in
'relief on account of natural calamities' under social services, and ‘power’ under economic services. The
share of development capital outlay in total expenditure
is, however, expected to increase in 2011-12(BE) by 0.7
percentage point mainly on account of a sharp increase
in the share of ‘major and medium irrigation and flood
control’ under economic services (Table IV.8, Appendix
Tables 8 to 14).
 |
Table IV.7: Expenditure Pattern of State Governments |
(Amount in ` billion) |
Item |
1990-98 |
1998-2004 |
2004-08 |
2008-09 |
2009-10 |
2010-11(RE) |
2011-12(BE) |
Variation
(Percent) |
(Average) |
Col.7/6 |
Col.8/7 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Aggregate Expenditure (1+2 = 3+4+5) |
1,511.5 |
3,670.8 |
6,311.8 |
8,823.3 |
10,153.3 |
12,363.5 |
13,897.5 |
21.8 |
12.4 |
|
(15.4) |
(16.4) |
(15.7) |
(15.7) |
(15.7) |
(16.1) |
(15.6) |
|
|
1. Revenue Expenditure |
1,230.5 |
2,959.7 |
4,818.0 |
6,819.9 |
7,991.5 |
9,932.5 |
11,021.4 |
24.3 |
11.0 |
of which: |
(12.5) |
(13.3) |
(11.9) |
(12.1) |
(12.4) |
(12.9) |
(12.4) |
|
|
Interest payments |
181.3 |
570.1 |
908.6 |
1,029.6 |
1,128.1 |
1,269.5 |
1,401.3 |
12.5 |
10.4 |
|
(1.8) |
(2.5) |
(2.3) |
(1.8) |
(1.7) |
(1.7) |
(1.6) |
|
|
2. Capital Expenditure |
280.9 |
711.1 |
1,493.8 |
2,003.5 |
2,161.8 |
2,431.0 |
2,876.0 |
12.5 |
18.3 |
of which: |
(2.9) |
(3.1) |
(3.7) |
(3.6) |
(3.3) |
(3.2) |
(3.2) |
|
|
Capital outlay |
146.2 |
328.1 |
886.5 |
1,426.3 |
1,492.2 |
1,704.0 |
2,027.5 |
14.2 |
19.0 |
|
(1.5) |
(1.5) |
(2.2) |
(2.5) |
(2.3) |
(2.2) |
(2.3) |
|
|
3. Development Expenditure |
993.1 |
2,093.6 |
3,682.9 |
5,670.9 |
6,377.3 |
7,841.0 |
8,783.6 |
23.0 |
12.0 |
|
(10.2) |
(9.4) |
(9.1) |
(10.1) |
(9.9) |
(10.2) |
(9.9) |
|
|
4. Non-Development Expenditure |
444.0 |
1,270.1 |
2,050.7 |
2,549.8 |
3,075.5 |
3,696.3 |
4,154.9 |
20.2 |
12.4 |
|
(4.4) |
(5.7) |
(5.1) |
(4.5) |
(4.8) |
(4.8) |
(4.7) |
|
|
5. Others* |
74.4 |
307.1 |
578.2 |
602.7 |
700.5 |
826.2 |
959.0 |
17.9 |
16.1 |
|
(0.8) |
(1.3) |
(1.5) |
(1.1) |
(1.1) |
(1.1) |
(1.1) |
|
|
RE: Revised Estimates. BE: Budget Estimates.
*: Includes repayment of loans to Centre, discharge of internal debt,grants-in-aid and contributions(compensation and assignments to local bodies).
Note: 1. Figures in parentheses are percentages to GDP.
2. Capital Expenditure is given exclusive of Public Accounts.
Also see Notes to Appendices.
Source: Budget documents of the State governments. |
4.17 Social sector expenditure by the States,
which had declined both as a proportion of total
expenditure as well as GDP during the fiscal
consolidation phase, particularly in the initial years,
has shown substantial improvement since 2008-09
on account of the renewed focus in this area, which
constitutes one of the primary responsibilities of the
States (Table IV.9). Within social services, the shares
of ‘education, sports, art and culture’, 'urban
development', 'welfare of SCs, STs and OBCs', and‘social security and welfare’ are expected to increase
in 2011-12(BE) as compared with those in 2010-
11(RE) (Table IV.10, Appendix Table 15). It may be
noted that apart from increased allocations, an
improvement in efficiency and delivery of services is
required to achieve the desired outcomes.
5. Assessment
Consolidated Position
4.18 The consolidated position of the States, as per
budgetary data, indicates that most States expect
further improvement in their finances during 2011-12 (Table IV.11). The consolidated revenue account is
budgeted to switch from deficit to surplus during 2011-
12 after a gap of two years, with 23 out of the 28 States
expecting to record revenue surplus. Of these, eight
states expect to record a turnaround in their revenue
account from deficit to surplus while nine expect to
record increases in their revenue surpluses as ratios to their GSDP. Three States have budgeted for a
reduction in their revenue deficit during the year. The
expected improvement of 0.5 percentage point in the
revenue balance to GDP ratio in 2011-12(BE), is to be
contributed by a commensurate reduction in revenue
expenditure to GDP ratio.
Table IV.8: Development Expenditure
vis-à-vis Total Expenditure |
(Amount in ` billion) |
Year |
Develop-
ment
Revenue
Expenditure |
Develop-
ment
Capital
Outlay |
Develop-
ment
Loans &
Advances |
Total
Develop-
ment
Expenditure |
1 |
2 |
3 |
4 |
5 |
2009-10 |
4,771.8 |
1,435.0 |
170.5 |
6,377.3 |
(47.0) |
(14.1) |
(1.7) |
(62.8) |
2010-11(RE) |
6,066.1 |
1603.9 |
171.0 |
7841.0 |
(49.1) |
(13.0) |
(1.4) |
(63.4) |
2011-12(BE) |
6,680.0 |
1899.2 |
204.4 |
8783.6 |
(48.1) |
(13.7) |
(1.5) |
(63.2) |
RE: Revised Estimates. BE: Budget Estimates.
Note: Figures in parentheses are percentages to aggregate expenditure.
Source: Budget documents of the State governments. |
Table IV.9: Trend in Aggregate Social Sector Expenditure of State Governments |
(Percent) |
Item |
1990-98 |
1998-2004 |
2004-08 |
2008-09 |
2009-10 |
2010-11
(RE) |
2011-12
(BE) |
(Average) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
TE/GDP |
15.4 |
16.4 |
15.7 |
15.7 |
15.7 |
16.1 |
15.6 |
SSE/GDP |
5.6 |
5.6 |
5.2 |
5.9 |
6.1 |
6.4 |
6.2 |
SSE/TE |
36.6 |
34.5 |
33.1 |
37.6 |
38.7 |
40.0 |
40.0 |
RE: Revised Estimates.
BE: Budget Estimates. GDP: Gross Domestic Product.
TE: Total Expenditure.
SSE: Social Sector Expenditure.
Source: Budget Documents of the State governments. |
4.19 Reflecting the improvement in the revenue
account, the consolidated GFD-GDP ratio is expected
to decline in 2011-12(BE), despite a marginal increase
in the overall CO-GDP ratio. The GFD-GSDP ratio is
expected to decline in 10 States during 2011-12(BE).
Fifteen States, most of which have shown
improvement in their revenue account, have budgeted
for absolute contraction in fiscal deficit during 2011-12.
Although the majority of States have budgeted for higher capital outlay in absolute terms, the capital
outlay (CO)-GSDP ratio is expected to decline in
eleven States during 2011-12(BE).
Decomposition and Financing of Gross Fiscal Deficit
4.20 As the consolidated States’ revenue
account is expected to revert to surplus position in
2011-12(BE) after a gap of two years, the
decomposition of the consolidated GFD of the
States has undergone a change (Appendix
Table 16). The surpluses in the revenue account
have reduced nearly one tenth of the borrowing
requirements for meeting the expenditure on
capital outlay and net lending. Non-debt capital
receipts are expected to increase by 0.5 percentage point in 2011-12(BE) over 2010-11(RE), mainly on account of the sale of land by a
State (Karnataka) (Table IV.12).
Table IV.10: Expenditure on Social Services (Revenue and Capital Accounts) – Composition |
(Percent of total expenditure on social services) |
Item |
1990-98 |
1998-2004 |
2004-08 |
2008-09 |
2009-10 |
2010-11
(RE) |
2011-12
(BE) |
(Average) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
Expenditure on Social Services (a to l) |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
(a) Education, Sports, Art and Culture |
51.9 |
52.6 |
47.3 |
43.3 |
45.3 |
46.1 |
46.9 |
(b) Medical and Public Health |
14.7 |
12.1 |
11.3 |
10.2 |
10.6 |
10.3 |
10.3 |
(c) Family Welfare |
1.0 |
2.1 |
1.6 |
1.6 |
1.7 |
1.6 |
1.6 |
(d) Water Supply and Sanitation |
7.3 |
7.6 |
8.2 |
7.4 |
6.0 |
4.9 |
4.7 |
(e) Housing |
2.9 |
2.9 |
2.9 |
3.8 |
2.4 |
3.0 |
3.0 |
(f) Urban Development |
2.4 |
3.2 |
5.4 |
8.9 |
8.4 |
8.1 |
8.5 |
(g) Welfare of SCs, ST and OBCs |
6.6 |
6.3 |
7.0 |
7.0 |
6.7 |
6.7 |
6.9 |
(h) Labour and Labour Welfare |
1.4 |
1.1 |
1.1 |
1.0 |
1.0 |
1.1 |
1.1 |
(i) Social Security and Welfare |
4.4 |
4.7 |
6.5 |
8.9 |
9.8 |
9.8 |
10.0 |
(j) Nutrition |
2.2 |
2.2 |
2.5 |
2.9 |
3.3 |
3.6 |
3.3 |
(k) Expenditure on Natural Calamities |
2.8 |
3.3 |
4.0 |
2.9 |
2.4 |
2.7 |
1.6 |
(l) Others |
2.4 |
2.0 |
2.2 |
2.0 |
2.4 |
2.1 |
2.0 |
RE: Revised Estimates. BE: Budget Estimates.
Source : Budget Documents of the State governments. |
Table IV.11 : State-wise Correction of RD and
GFD - 2011-12 (BE) over 2010-11 (RE) |
State |
Revenue Balance |
Gross Fiscal Deficit |
Correction
over
2010-11
(RE)
(` billion) |
Per-
centage
to
Total |
Correction
over
2010-11
(RE)
(` billion) |
Per
centage
to
Total |
1 |
2 |
3 |
4 |
5 |
|
1. |
Andhra Pradesh |
-32.9 |
8.4 |
39.3 |
-68.4 |
2. |
Bihar |
-38.7 |
9.9 |
-25.3 |
44.0 |
3. |
Chhattisgarh |
-2.7 |
0.7 |
9.9 |
-17.2 |
4 |
Goa |
5.0 |
-1.3 |
5.8 |
-10.0 |
5. |
Gujarat |
-60.1 |
15.3 |
-17.4 |
30.2 |
6. |
Haryana |
-18.0 |
4.6 |
-7.4 |
12.9 |
7. |
Jharkhand |
-38.5 |
9.8 |
-9.1 |
15.7 |
8. |
Karnataka |
3.2 |
-0.8 |
7.8 |
-13.6 |
9. |
Kerala |
18.0 |
-4.6 |
28.5 |
-49.5 |
10. |
Madhya Pradesh |
8.6 |
-2.2 |
-3.4 |
6.0 |
11. |
Maharashtra |
-57.5 |
14.7 |
-22.4 |
38.9 |
12. |
Odisha |
-3.8 |
1.0 |
11.0 |
-19.1 |
13. |
Punjab |
1.7 |
-0.4 |
21.1 |
-36.7 |
14. |
Rajasthan |
-12.4 |
3.2 |
5.1 |
-8.9 |
15. |
Tamil Nadu |
-33.0 |
8.4 |
-7.3 |
12.6 |
16. |
Uttar Pradesh |
-41.8 |
10.7 |
-39.3 |
68.4 |
17. |
West Bengal |
-88.8 |
22.7 |
-54.5 |
94.7 |
Total (A) |
-391.6 |
100.0 |
-57.5 |
100.0 |
1. |
Arunachal Pradesh |
5.9 |
-10.3 |
0.7 |
-2.2 |
2. |
Assam |
-63.7 |
111.3 |
-51.8 |
161.8 |
3. |
Himachal Pradesh |
-2.1 |
3.6 |
-1.9 |
5.9 |
4. |
Jammu and Kashmir |
14.0 |
-24.5 |
15.9 |
-49.7 |
5. |
Manipur |
1.0 |
-1.8 |
-0.1 |
0.4 |
6. |
Meghalaya |
-3.0 |
5.2 |
0.4 |
-1.3 |
7. |
Mizoram |
-3.1 |
5.3 |
-5.6 |
17.5 |
8. |
Nagaland |
-1.0 |
1.8 |
1.1 |
-3.5 |
9. |
Sikkim |
-4.9 |
8.6 |
-3.5 |
11.1 |
10. |
Tripura |
-3.1 |
5.3 |
-2.2 |
7.0 |
11. |
Uttarakhand |
2.6 |
-4.5 |
15.1 |
-47.0 |
Total (B) |
-57.2 |
100.0 |
-32.0 |
100.0 |
Grand Total (A + B) |
-448.8 |
100.0 |
-89.5 |
100.0 |
Memo item: |
| 1. |
NCT Delhi |
50.1 |
- |
12.5 |
-- |
2. |
Puducherry |
-3.7 |
- |
0.6 |
- |
RE : Revised Estimates. BE : Budget Estimates.
Note : Negative (-) sign indicates improvement in deficit indicators.
Source : Budget Documents of the State governments. |
4.21 Market borrowings would continue to remain
the major source of financing the GFD of the States.
Its share in GFD financing, which had declined in
2010-11(RE), is expected to increase sharply in
2011-12 on account of a decrease in the share of
securities issued to the NSSF due to an anticipated
decline in small savings collections. As the revised
estimates for 2010-11 show a significant drawdown of cash balances/cash investment accounts of the
States to finance their GFD, a modest build up in the
cash balances is budgeted for 2011-12, resulting in a
negative contribution to GFD (Table IV.12). The
share of loans from the Centre is expected to rise
more than two-fold during 2011-12(BE), although it
will continue to remain a minor contributor in GFD
financing.
Budgetary Variations: State Budget vis-à-vis Union
Budget
4.22 Significant differences exist between the budget
estimates presented in the State Budgets and the Union
Budget for common items. In general, States tend to
overestimate the grants and loans they receive from the
Centre but underestimate their share in Central taxes.
This trend is also seen in the budget estimates for 2011-
12. Since 2008-09, States have been underestimating
the flows from the NSSF (Table IV.13).
Table IV.12: Decomposition and Financing
Pattern of Gross Fiscal Deficit - 2009-10
(Accounts) to 2011-12 (BE)
|
(Percent to GFD) |
Item |
2009-10 |
2010-11
(RE) |
2011-12 (BE) |
1 |
2 |
3 |
4 |
Decomposition (1+2+3-4) |
100.0 |
100.0 |
100.0 |
1. Revenue Deficit |
16.4 |
12.2 |
-10.0 |
2. Capital Outlay |
79.0 |
82.5 |
102.5 |
3. Net Lending |
5.0 |
5.8 |
8.5 |
4. Non-debt Capital Receipts |
0.4 |
0.5 |
1.0 |
Financing (1 to 11) |
100.0 |
100.0 |
100.0 |
1. Market Borrowings |
59.7 |
50.4 |
71.5 |
2. Loans from Centre |
-0.9 |
2.3 |
4.8 |
3. Special Securities issued to NSSF |
12.8 |
17.9 |
8.8 |
4. Loans from LIC, NABARD, NCDC, SBI and Other Banks |
4.3 |
1.9 |
3.5 |
5. Provident Funds other Funds. |
12.3 |
11.0 |
13.0 |
6. Reserve Funds |
-1.1 |
1.2 |
3.3 |
7. Deposits and Advances |
6.6 |
1.9 |
1.7 |
8. Suspense and Miscellaneous |
3.1 |
-2.6 |
3.5 |
9. Remittances |
1.6 |
4.3 |
-3.6 |
10.Others |
-2.4 |
-3.6 |
-3.0 |
11.Overall Surplus (-)/Deficit (+) |
4.1 |
15.3 |
-3.6 |
BE : Budget Estimates. RE : Revised Estimates.
Note: 1. See Notes to Appendix Table 17.
2.‘Others’ include Compensation and Other Bonds, Loans
from Other Institutions, Appropriation to Contingency
Fund, Inter-State Settlement and Contingency Fund.
Source : Budget Documents of the State governments. |
Table IV.13: Budgetary Data Variation- State Budgets and Union Budget |
(Amount in ` billion) |
Item |
2009-10 (BE) |
2010-11 (BE) |
2011-12 (BE) |
State
Budgets |
Union
Budget |
Diffe-
rence* |
State
Budgets |
Union
Budget |
Diffe-
rence* |
State
Budgets |
Union
Budget |
Diffe-rence* |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
1. Shareable Taxes from Centre |
1,857.2 |
1,643.6 |
213.6 |
2,004.7 |
2,090.0 |
-85.3 |
2,508.9 |
2,634.6 |
-125.7 |
| |
|
|
(13.0) |
|
|
(-4.1) |
|
|
(-4.8) |
2. Grants-in-Aid |
1,686.8 |
1,398.5 |
288.4 |
1,832.8 |
1,519.6 |
313.2 |
2,287.5 |
1,871.3 |
416.2 |
| |
|
|
(20.6) |
|
|
(20.6) |
|
|
(22.2) |
3. Loans from Centre (Net) |
92.9 |
30.9 |
62.0 |
69.7 |
33.6 |
36.1 |
95.9 |
17.3 |
78.6 |
| |
|
|
(200.4) |
|
|
(107.2) |
|
|
(454.6) |
4. NSSF (Net) |
90.3 |
117.4 |
-27.2 |
120.8 |
298.6 |
-177.8 |
174.9 |
341.7 |
-166.8 |
| |
|
|
(-23.1) |
|
|
(-59.6) |
|
|
(-48.8) |
*: Negative (-)/Positive (+) sign implies underestimation/overestimation in State budgets in comparison with Union Budget.
Note: Figures in parentheses are percentage variations over Union Budget.
Source: Budget Documents of the State governments and the Central government. |
Performance of States vis-à-vis the Projections of
Thirteenth Finance Commission
4.23 The ThFC expected the States to resume
their fiscal correction path by 2011-12, allowing for
a year of adjustment in 2010-11. Although the
consolidated GFD-GDP ratio for 2011-12 as
budgeted by the States is lower than that projected
by the ThFC, this is on account of the upward
revision implicit in the new GDP series. If the GDP
projection of the ThFC, based on the old series, is
taken into account, the GFD-GDP ratio works out
higher at 2.7 per cent than the projected level of
2.5 per cent by the ThFC. The Commission had
also made a State-wise assessment of own receipts and select expenditure for each of the
years in the award period of 2010-2015.
Benchmarking these select fiscal indicators with
the latest fiscal position for 2010-11 and 2011-12
(relative to GSDP projections of the ThFC), two
features emerge. First, the States’ own resources
(both tax revenue and non-tax revenue)-GSDP
ratio during 2010-11(RE) and 2011-12(BE), are
higher than the assessment made by the ThFC for
these years. Second, with regard to committed
expenditure, while interest payments-GSDP ratio
during 2011-12(BE) was lower than the respective
ratios as assessed by the ThFC, pension-GSDP
ratio during 2010-11(RE) and 2011-12(BE) were
higher than the ThFC assessment (Table IV.14).
Table IV.14: Performance of the States vis-à-vis Thirteenth Finance Commission Assessment |
(Percent of GSDP) |
Item |
2010-11 |
2011-12 |
Based on |
13th Finance
Commission
Assessment |
Revised
Estimates |
13th Finance
Commission
Assessment |
Budget Estimates |
1 |
2 |
3 |
4 |
5 |
Own Revenue Receipts (1+2) |
10.1 |
10.5 |
10.1 |
10.7 |
1. Own Tax Revenue |
8.5 |
8.7 |
8.6 |
9.0 |
2. Own Non-tax Revenue |
1.6 |
1.8 |
1.5 |
1.7 |
Revenue Expenditure |
|
|
|
|
of which: |
|
|
|
|
Interest Payments |
2.4 |
2.4 |
2.4 |
2.3 |
Pension |
1.5 |
2.0 |
1.5 |
2.0 |
Note: As the GSDP series were revised after the release of the Thirteenth Finance Commission (ThFC) report, the GSDP projected by the ThFC has been used uniformly to make the data comparable. |
6. Conclusion
4.24 The foregoing analysis of the consolidated
budgetary fiscal position of the State governments for
2011-12 suggests continued endeavour by the States
for a graduated reduction in deficit-GDP ratios
enabled by a switchover to revenue account surplus.
The fiscal position for 2009-10 (Accounts) in
comparison with revised estimates for the year
reflected less fiscal deterioration, as actual
expenditures fell below the earlier assessed levels,
particularly in respect of committed revenue
expenditures. The favourable impact of economic
recovery on revenues improved the fiscal position for
2010-11(RE) vis-à-vis 2009-10, although key deficit
levels remained moderately higher than the budget
estimates. The fiscal correction at the consolidated
State level for 2011-12(BE) envisaged a surplus in
the revenue account after a gap of two years,
generated primarily through lower growth in revenue
expenditures. The post-crisis progress of fiscal
consolidation for the States, at a consolidated level,
has remained in consonance with the path of the
ThFC. Although the consolidated GFD-GDP ratio for
the States, in terms of revised GDP series, remains
within the target of 2.5 per cent for 2011-12 set by the
ThFC, the ratio works out higher if the projected GDP series of the ThFC is taken into account. The fiscal
deficit ratio, in terms of aggregate projected GSDP,
also works out higher than the ThFC target for
2011-12. The States have budgeted for higher grants
from the Centre than provided for in the Union
Budget, non-realisation of which could wipe out the
envisaged surplus in the revenue account. Within
States’ non-tax receipts, the continued poor
performance in recovery of services is an area of
concern. On the expenditure front, the States have
budgeted substantial deceleration in aggregate
expenditure growth for 2011-12, to be achieved
through reduced growth in development revenue
expenditure, interest payment and pension
expenditure. On the other hand, States have
proposed an accelerated growth in capital outlay, a
part of which would be financed by the surpluses
they expect to generate on their revenue account.
Any slippage in controlling committed expenditure or
realisation of revenue surplus could adversely affect
the achievement of the fiscal deficit target and/or
compress capital outlay. There is a need to accord
sufficient emphasis to the quality of the fiscal
consolidation process by ensuring that the States do
not cut back development expenditure in order to
meet their deficit targets.
|