₹6.2 trillion in FY24, rating agency Icra Ltd. said on Tuesday. However, this projected capital expenditure (capex) falls short of the Budget Estimates (BE) which anticipated a spending of ₹6.7 trillion.
Revenue shortfalls are expected for FY24, with revenue and fiscal deficits for these states expected to be at ₹2.1 trillion and ₹8.3 trillion, overshooting the budgeted ₹1.4 trillion and ₹7.7 trillion, respectively, the rating agency said. Furthermore, debt and guarantee leverage levels of these states are forecast to increase to 30% of their Gross State Domestic Product (GSDP) in FY24, up from 28.9% in FY23. The central government had initiated an interest-free capex loan scheme for states in response to the early COVID-19 pandemic challenges.
For the current fiscal year, ₹400 billion of the allocated ₹800 billion for the 'Special Assistance to States for Capital Investment' has been disbursed. An additional ₹300 million is set for release upon demonstration of state reforms or project proposals. In FY24, 16 states have opted for the loan scheme, including Arunachal Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Mizoram, Odisha, Rajasthan, Sikkim, Tamil Nadu, Telangana and West Bengal.
Icra's 13-state sample included Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal. The combined GSDP (at current prices) of these states comprises nearly 83% of the Indian GDP (at current prices) in FY22, the rating agency said. "The anticipated YoY surge in capex benefits from the prescient support extended by the Government of India (GoI) to the state governments through the increase
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