Taking into account the trend of lower-than-budgeted capital outlay as well as back-ended spending in recent years, rating agency Icra on Wednesday said the combined spending of the 18 states reviewed could be 23% lower than the FY23 bugdet estimate.
The combined revenue spending of the 18 states increased by 15.3% in H1 FY23 from H1 FY22 and was equivalent to 42% of the FY23 BE. With a healthy growth in revenue receipts relative to revenue expenditure for 14 of the 18 states in H1 FY23, the combined revenue deficit of the 18 states narrowed to a mild Rs. 0.3 trillion from Rs 1.3 trillion, respectively, Icra said.
Despite this, their combined capital outlay stood at Rs 1.59 trillion in H1 FY23, a muted 2.2% higher than H1 FY22. The capital outlay in H1 FY2023 was a modest 26% of the combined FY23 BE, with that of Haryana, Jharkhand, Maharashtra, Odisha, Punjab, Uttarakhand and UP below/equal to 20% of their respective FY23 BE, it said.
Some of the states, including Andhra Pradesh, Haryana, Uttar Pradesh, and West Bengal, have budgeted for a high 77-127% on-year growth in their capital outlay for FY23. For the combined capital outlay of the 18 states to be in line with the FY23 BE of Rs 6.2 trillion, it would imply spending Rs 4.6 trillion in H2 FY23 or 57% higher than the actual capital outlay of Rs 3 trillion in H2 FY22, the agency said.
The 18 states had budgeted their capital outlay at Rs 6.2 trillion in FY23BE, a sharp 37.8% higher than the Rs 4.5 trillion in FY22.
As per the data released by the Comptroller and Auditor General (CAG) for H1FY23, the combined revenue receipts of the 18 states increased by about 27% to Rs 13.9 trillion in H1FY23 from Rs 10.9 trillion in H1FY22, led by tax revenues.
The 18 states covered in this note are Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand and West Bengal.