States have been found to be making efforts at fiscal consolidation and adhere to target set by the Finance Commission mainly with regard to fiscal deficit, Care Ratings said today.
“States expect to see an improvement in their financial position in 2016-17 with fewer states expected to record a revenue deficit… Nine states posted a revenue deficit in 2015-16 and seven states have projected a revenue deficit for 2016-17,” the rating agency said in its State Budget Analysis-2016-17.
The statement said states whose budgets have been looked at are Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarkhand and West Bengal.
These states account for around 90 per cent of India’s GDP.
The majority of the states are found to be fairly self- reliant with over 50 per cent of their revenues being accounted for by their own sources (tax and non-tax), Care Ratings said.
States have been found to be striving to meet their commitments of fiscal consolidation. Most states have been maintaining their fiscal deficit within the target 3 per cent of Gross State Domestic Product (GSDP), it added.
The 13th Finance Commission has set a target of zero revenue deficit for states and gross fiscal deficit of not more than 3 per cent of GSDP.