'State' Of Affairs - Combined Fiscal Deficit At Just 34% Of Budget Estimates In H1 FY23: Motilal Oswal
Based on provisional data of the 19 states, total spending of all states grew 16.7%/14.5% YoY in Q2/H1 FY23, respectively.
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Motilal Oswal Report
Based on provisional data of the 19 states, total spending of all states grew 16.7%/14.5% YoY in Q2/H1 FY23, respectively. Total receipts, however, rose slightly faster at 20.9%/26.3% YoY during the corresponding periods.
Consequently, the states’ aggregate fiscal deficit came in at Rs 1.7 trillion/Rs 2.4 trillion (or 2.6%/1.8% of gross domestic product) in Q2/H1 FY23, respectively.
As a percentage of budget estimates, while total spending was at 39.2% in H1, total receipts were 42% of BEs over the period. Thus, states’ aggregate fiscal deficit was only 27.2% of BEs, the lowest in nine years during the corresponding period.
An analysis of individual states suggests that two states – Maharashtra and Odisha – witnessed fiscal surpluses in H1 FY23. Some large states such as – Karnataka, Gujarat, Tamil Nadu, Uttar Pradesh and Madhya Pradesh posted very small deficits (less than 30% of BEs), while Bihar and Andhra Pradesh have already breached their full-year targets in H1 FY23.
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