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State of spending

While the impact of revenue spending on economic activity lasts for just a year, the impact of capital outlay is stronger and lasts for much longer, according to a study by the Reserve Bank of India.

States with high revenue spending and low capital spending will have slower revenue growth and will see much higher interest outgo.
States with high revenue spending and low capital spending will have slower revenue growth and will see much higher interest outgo.

The share of revenue expenditure in total expenditure for 10 states lies in the range of 80-90%; such high revenue spend results in poor spending quality, especially when it comes to capital and developmental activities.

While the impact of revenue spending on economic activity lasts for just a year, the impact of capital outlay is stronger and lasts for much longer, according to a study by the Reserve Bank of India.

States with high revenue spending and low capital spending will have slower revenue growth and will see much higher interest outgo.

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