Despite an expected deceleration, India is expected to remain the fastest-growing economy among G20 countries this year. The growth momentum should benefit the economies of states.
While CRISIL foresees India's growth slowing to 6.8% on-year fiscal from 8.2% in the last, weighed down by high interest rates and low fiscal impulse, there are several positives.
Last year's laggards - agriculture and consumption - are poised to do better. The monsoon season has been progressing well and kharif sowing is higher on-year. In addition, government spending on employment and asset-generating schemes should support consumption growth.
Consequently, states are expected to see steady growth in revenue, riding on strong momentum in goods and services tax collection and devolutions from the Centre.
That said, continued focus on development and welfare, and high committed spends (salaries, pensions and interest cost) will keep their expenditure elevated and sticky. The borrowing limit for this fiscal is 3% of the gross fiscal deficit to gross state domestic product (additional 0.5% linked to power sector reforms).
However, Rs 1.5 lakh crore interest-free capex loans from the Centre should support capital outlay growth this fiscal which saw strong growth last year.Against this backdrop, CRISIL is organising a webinar on December 16, 2024, at 11am titled, State of recovery, with discussions centred around:
Macroeconomic performance of states
Trends in revenue collection and deficit
Capital outlay trends
Outlook on fiscal deficit
Impact of indebtedness on deficit financing
The presentation will be followed by a panel discussion with sector experts and a Q&A session.
Disclaimer: This event and its content are intellectual property and confidential information of CRISIL. Any use of the same without written permission of CRISIL is illegal and hence punishable. Recording the webinar in any form in full or part or copying, altering, distributing or streaming the webinar is strictly prohibited and violation will attract legal action.
