The fiscal deficit of states touched a four-year low, at 1.9% in the nine months of the current financial year, because of larger devolutions from the Centre coupled with higher grants-in-aid.
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This led to a strong growth, of 22% year-on-year, in the total transfers to the states, as provisional data of 18 large states show.
States have cut capital spending and have borrowed only 69% of the planned market borrowings as of mid-February.