The RBI's State Finances Report 2024-25 points out fiscal reforms, improved expenditure quality, and debt consolidation for state governments.
The Reserve Bank of India (RBI) has unveiled its "State Finances: A Study of Budgets of 2024-25" report, emphasizing the theme of “Fiscal Reforms by States.” The report provides a detailed analysis of state government finances for 2024-25, comparing them to the actual and revised figures for 2022-23 and 2023-24.
Key findings include states maintaining their consolidated gross fiscal deficit (GFD) within 3% of GDP during 2022-23 and 2023-24, with a slight increase to a budgeted 3.2% for 2024-25. Capital expenditure has shown sustained growth, rising to 3.1% of GDP in 2024-25, from 2.4% in 2021-22. However, outstanding liabilities, though reduced to 28.5% of GDP by end-March 2024, remain above pre-pandemic levels.
The RBI recommends a risk-based fiscal framework, better debt consolidation strategies, and enhanced transparency.
