There are many such lucrative schemes in the freebies schemes in which the benefits are given directly to the citizens. According to the report, the state of Telangana has started spending up to 35 percent of its total revenue on these. Rajasthan, Chhattisgarh, Andhra Pradesh, Bihar, Jharkhand, West Bengal, Kerala are also spending 5 to 19 percent of their revenue on these.

Many states have started increasing their expenditure on populist schemes rapidly. When the scheme of getting compensation in lieu of GST from the Center ends in June, it may increase problems for them. They have to reschedule their expenses. Plans have to be made according to the amount of income that is being generated. This concern and advice was put forth by SBI in its latest economic report on Monday.

In this, reference was made to the farmer loan waiver being given by the state governments, restarting the old pension scheme, etc. Soumya Kant Ghosh, Principal Economic Adviser in SBI said that 20 percent contribution of the total income of most states is coming from GST by the Center.

With the introduction of GST by ending the era of indirect taxes, the Center had announced to give GST compensation for the next 5 years from 2017. It is ending in June, states are demanding to extend it further. On the other hand even in such times they are increasing the expenditure in free schemes difficult to sustain financially. Ghosh said that the states should spend logically according to revenue income by not spending more than earning, consider the priorities.

Gave up to 35 percent of revenue for freebies
There are many such lucrative schemes in the freebies schemes in which the benefits are given directly to the citizens. According to the report, the state of Telangana has started spending up to 35 percent of its total revenue on these. Rajasthan, Chhattisgarh, Andhra Pradesh, Bihar, Jharkhand, West Bengal, Kerala are also spending 5 to 19 percent of their revenue on these.

circumstances

  • The financial condition of the states is already in turmoil due to the damage caused by the pandemic.
  • An analysis of the budgets of 18 states shows that they have increased the average fiscal deficit to the Gross State Domestic Product (GSDP) by 0.5 to 4 per cent over budget estimates. In 6 states it is more than 4 percent.

Question on Budget 2023 Goals
According to the report, for the budget for the financial year 2023, the states have claimed to have a deficit of up to 3.4 percent. There are many question marks over whether they will be able to do so. Limited revenue income, weakness in maintaining fiscal discipline and over-zealousness of some states can become a hindrance in keeping the deficit low.

Many states have started increasing their expenditure on populist schemes rapidly. When the scheme of getting compensation in lieu of GST from the Center ends in June, it may increase problems for them. They have to reschedule their expenses. Plans have to be made according to the amount of income that is being generated. This concern and advice was put forth by SBI in its latest economic report on Monday.

In this, reference was made to the farmer loan waiver being given by the state governments, restarting the old pension scheme, etc. Soumya Kant Ghosh, Principal Economic Adviser in SBI said that 20 percent contribution of the total income of most states is coming from GST by the Center.

With the introduction of GST by ending the era of indirect taxes, the Center had announced to give GST compensation for the next 5 years from 2017. It is ending in June, states are demanding to extend it further. On the other hand even in such times they are increasing the expenditure in free schemes difficult to sustain financially. Ghosh said that the states should spend logically according to revenue income by not spending more than earning, consider the priorities.

Gave up to 35 percent of revenue for freebies

There are many such lucrative schemes in the freebies schemes in which the benefits are given directly to the citizens. According to the report, the state of Telangana has started spending up to 35 percent of its total revenue on these. Rajasthan, Chhattisgarh, Andhra Pradesh, Bihar, Jharkhand, West Bengal, Kerala are also spending 5 to 19 percent of their revenue on these.

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