States’ fiscal deficit soars to ~4.93 lakh cr in FY16

Led by the most populous Uttar Pradesh and the largest Rajasthan, the gross fiscal deficits of all the states skyrocketed to ~4,93,360 crore in FY16 from ~18,790 crore in FY91, according to the latest Reserve Bank of India (RBI) data.

According to the second edition of RBI’s statistical publication, ‘Handbook of Statistics on States 2016-17’ released on Saturday, the gap is projected to improve to ~4,49,520 crore according to the Budget Estimates of the states for FY17.

Uttar Pradesh had a fiscal deficit of a paltry ~3,070 crore in FY91, which zoomed to ~64,320 crore in FY16 and is projected to improve to ~49,960 crore in FY17.

According to the 16-year data, Rajasthan, which had a gross fiscal deficit of ~540 crore in FY91, saw it soaring to ~67,350 crore in FY16 and is projected to decline to ~40,530 crore in FY17.

Maharashtra, one of the most urbanised and industrialised states, had a gap of ~1,020 crore in FY91 but the same jumped to ~37,950 crore in FY16, which is projected to improve to ~35,030 crore in FY17.

On the other hand, Gujarat had only ~1,800 crore in fiscal deficit in FY91 but the same had jumped to ~22,170 crore in FY16 and is projected to further deteriorate in FY17 to ~24,610 crore.

Another state projected to have higher deficit in FY17 is Andhra Pradesh at ~20,500 crore, which was ~17,000 crore in FY16 and ~970 crore in FY91.

Similarly, Tamil Nadu, known for state freebies, is projected to have a higher deficit at ~40,530 crore in FY17, up from ~32,320 crore a year ago and ~1,130 crore in FY91.