Mint Explainer: How fiscally healthy are states?

livemint.com:

₹1 trillion in FY23, as per provisional actuals, led by Uttar Pradesh and Maharashtra, ICRA Ltd said. This increase in capital spending benefitted from the step-up under the central government's interest-free capex loan to an estimated Rs.

812 billion in FY23 from Rs. 125 billion in FY22, as per the ratings agency.

States get 42% of the central government's divisible pool of taxes and hence an improvement in the centre's revenue collection benefits states too. Besides, state governments have also been benefiting from the buoyancy in state GST (SGST) collection.

An improvement in tax revenue will help states reduce their reliance on market borrowings to finance their fiscal deficit. In June, central and state governments collected more than ₹1.61 trillion in GST revenue, 12% more than they collected in the same month a year ago.