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Fiscal deficit of states to hit peak of Rs 8.7 trn as tax collections slide

The Covid pandemic-induced lockdown and consequent slump in economic activity will hit tax collections of states and result in a near four-fold expansion in their revenue deficits this fiscal, year-on-year, ratings agency Crisil said in a report. With this, the states’ aggregate gross fiscal deficit (GFD) will not only get expanded to an all-time high of Rs 8.7 trillion, or 4.7 per cent of GSDP, but also skew its composition towards revenue deficit which is relatively less value-accretive towards future tax potential, the report said. Though tax collections are expected to […]

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