FE Editorial : State of the deficit
From an average of 2.7% in much of the 1990s to 4.1% in the 1998-2004 period, the fiscal deficit to GDP ratio for states fell to 2.3% in the 2004-08 boom years, then rose to 2.7% in the next two years, and is projected to fall to 2.1% in the current financial year. The progress across states, needless to say, is not uniform but the important thing to keep in mind is that in FY11, 3 non-special category states saw a deterioration in their fiscal deficit, as did 4 special category states; in FY12, this rose to 10 non-special category states and 8 special category ones. In FY13, this is budgeted to fall to 8 non-special category states and 2 special category ones.
While there’s little doubt the buoyancy of central taxes has played
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