RBI Bulletin

Search Archives

Section

()

Finances of State Governments – 2011-12: Highlights

Date : Jun 11, 2012

Finances of State Governments – 2011-12: Highlights*

The consolidated fiscal position of the States/Union Territories is budgeted to improve in 2011-12 with a return to surplus in the revenue account, reduction in fiscal deficit-GDP ratio and declining trend in debt-GDP ratio. This trend is poised to continue with majority of the States amending their Fiscal Responsibility and Budget Management Acts which map out graduated reductions in fiscal deficit and debt relative to their GSDPs over the medium-term. An analysis of the Reserve Bank’s contribution to finances of States over the years shows that, apart from being a banker and debt manager of the States, the Reserve Bank has progressively played a greater role since the 1990s as reflected in the formulation of Model Fiscal Responsibility Legislations for the States and advisory role in respect of fiscal sustainability issues from time to time. As the States return to rule-based fiscal consolidation, they need to deal with structural rigidities in their finances, focus on qualitative aspects of the fiscal consolidation process, undertake effective expenditure management and address issues relating to State Power Utilities keeping in view their impact on State finances.

This article presents the highlights of the State Governments’ budgets for 2011-12. A detailed analysis is presented in ‘State Finances: A Study of Budgets of 2011-12’ that was released in March 2012¹.

Presented against the backdrop of better economic growth performance in 2010-11, the State budgets for 2011-12 indicated the intent of the State governments to continue their progressive exit from the expansionary fiscal policy of the crisis years (2008-09 and 2009-10). The focus was more on expenditure control measures against the backdrop of the rollback of fiscal stimulus measures and the tapering off of the impact of the Sixth Pay Commission Award. All States, with the exception of Goa, have amended their Fiscal Responsibility and Budget Management (FRBM) Acts/Rules. Under the amended Acts, the State governments are aiming to eliminate revenue deficits and to bring about gradual reductions in fiscal deficit and debt levels latest by 2014-15, as was recommended by the Thirteenth Finance Commission (ThFC). While this augurs well for medium-term fiscal sustainability of the States, the eventual fiscal outcome would be shaped not only by the macroeconomic conditions but also by the joint commitment of the Centre and the States to implement fiscal reforms in the pipeline.

The issues and perspectives are presented hereunder followed by the policy initiatives of State Governments, the Government of India, and of the Reserve Bank of India. An analysis and assessment of the consolidated budgetary position of the State Governments for the year 2009-10 (Accounts), 2010-11 (Revised Estimates) and 2011-12 (Budget Estimates) is presented followed by a brief on outstanding liabilities and Market Borrowings of State Governments. As a special theme, a brief on the ‘Role of the Reserve Bank in State Finances’ is provided at the end.

Issues and Perspectives

As the second phase of rule-based fiscal consolidation has commenced for the States from 2011-12, the underlying emphasis should not only be on reverting to a sustainable fiscal path but also in drawing lessons from the past and developing new perspectives to address the key challenges. In particular, there is a need to address the structural rigidities, especially for the States which had missed out in the first phase of implementation of rule-based fiscal discipline. Greater fiscal transparency is also critical for monitoring the quality, durability and effectiveness of fiscal correction at the State level. The efficiency of expenditure management systems for the public sector as a whole needs to be improved for achieving desired outcomes. The proposed rationalisation of centrally sponsored schemes is expected to enable States to make efficient use of funds at the State government level and ensure adequate financial participation of the States in these schemes. From the perspective of fiscal stability, deterioration in the financial position of State Power Utilities (SPUs) may require a careful assessment of its potential impact on State finances. With increasing recourse to public-private partnerships mode for project financing, State governments need to recognise both explicit and implicit contingent liabilities arising on account of their participation in PPP schemes. Against the backdrop of an uncertain global economic environment, prudent management of interest rate and exchange rate risks associated with external loans (on back-to-back basis) also poses a new challenge.

Policy Initiatives

The policy initiatives and schemes proposed by the State governments, the Government of India and the Reserve Bank of India during 2011-12, which impinge on State finances are summarised as under.

State Governments

The broad thrust of policy proposals announced in State budgets for 2011-12 has been to carry forward the fiscal consolidation process which was re-started in 2010-11, in line with the recommendation of the ThFC.

On the revenue side, the focus has been more on tax enhancing measures while measures such as exemption/reduction in value added tax (VAT) rates on food and petroleum products and excise duties on petroleum products have also been announced to tackle the situation of price rise in essential commodities. On the expenditure side, besides increasing expenditure on food security and strengthening the public distribution system, States have proposed higher allocations for various Plan schemes (Centrally sponsored schemes and State plan schemes), particularly those relating to education, health, transportation, housing and employment generation.

In social sector, several measures have been proposed in the State budgets for 2011-12 to promote education, health, housing, social security, women empowerment, and welfare of SCs and STs. Emphasis has also been placed on improving infrastructure for the delivery of public goods like education and health services.The strengthening of social security measures such as scholarships for students, old age pensions, and insurance for vulnerable groups has also been announced in some of the State budgets. Development of infrastructure and other services through public private partnerships (PPP) has been another priority area in terms of policy initiatives of the States in 2011- 12. While expenditures aimed at increasing investments would work towards improving the growth climate, there is scope for controlling the tendency of several States to undertake populist measures that provide short-term assistance to various segments of the population, but in that process impose fiscal burden on the States. In addition to tax exemptions/reduction in taxes on food items to contain the rising food prices, State Governments have also continued to allocate higher resources towards bringing about an improvement in agricultural production.

Almost all major States have announced measures to enhance irrigation potential with a view to increase agricultural productivity. State governments have also announced certain sector-specific policy initiatives to promote industrial growth and industrialisation. A large number of States are taking up construction of roads and bridges and facilitating power generation, both of which are important inputs for industrial development.

The institutional measures adopted by the State governments such as Fiscal Responsibility and Budget Management (FRBM) Acts, Value Added Tax (VAT), New Pension Schemes (NPS), and setting up of Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF) have helped them to consolidate their finances in the last decade. The ThFC had worked out a fiscal consolidation roadmap for the States requiring them to eliminate their revenue deficit and achieve a fiscal deficit of 3 per cent of their respective GSDP, latest by 2014-15. It had also recommended a combined States’ debt-GDP target of 24.3 per cent to be reached during this period. The States were required to amend or enact their FRBM Acts to conform to these recommendations. Accordingly, all states, barring Goa, have amended their FRBM Acts/Rules, setting out annual deficit/debt targets in line with the ThFC recommendations. The FRBM Acts are expected to contribute to further improvement in the State finances, provided the macroeconomic scenario remains favourable.

Government of India

The Constitution Amendment Bill for goods and services tax (GST) was introduced in March 2011. The drafting of model legislation for Centre and State GST in concert with the States is under progress. The Centre has made significant progress on the GST Network (GSTN), which will be set-up as a National Information Utility (NIU) to build the necessary IT infrastructure for the introduction of GST. The key business processes of registration, returns and payments are in advanced stages of finalisation. The National Securities Depository Limited (NSDL) has been selected as the technology partner for incubating the NIU that will establish and operate the IT backbone for GST.

Reserve Bank of India

Pursuant to the signing of the agreement between the Government of Jammu and Kashmir and the Reserve Bank of India, an arrangement for cash management was put in place from April 1, 2011. The Ways and Means Advances (WMA) limit for the States including Jammu and Kashmir and the Union Territory of Puducherry was placed at ` 102.40 billion for the financial year 2011-12. The rates of interest on Normal and Special WMA and OD continued to be linked to the repo rate.

Consolidated Fiscal Position of State Governments

Accounts: 2009-10

The fiscal position of the States in terms of key deficit indicators had deteriorated during 2009-10 over the previous year, leading to the re-surfacing of revenue deficit after a gap of three years. A sharp increase in committed expenditure on account of pay/pension revisions and arrear payments under the Sixth Pay Commission Award had primarily contributed to the fiscal expansion. The extent of fiscal deterioration, however, turned out to be much less and the fiscal outcome of the States at the consolidated level showed marked improvement when the revised estimates for 2009-10 translated into accounts. Lower-than anticipated revenue expenditure more than offset the shortfall in revenue receipts, resulting in a 0.2 percentage point reduction in the consolidated revenue deficit to GDP ratio in 2009-10 vis-à-vis the revised estimates for the year.

The lower-than-anticipated revenue deficit together with a decline in capital outlay resulted in a reduction of 0.4 percentage point in the gross fiscal deficit (GFD)-GDP ratio in 2009-10 (Accounts) over the revised estimates. Consequently, the primary deficit of the States was also contained in 2009-10 (Accounts) as compared with 2009-10(RE) (Table 1 and Appendix Table 1).

Revised Estimates: 2010-11

The strengthening of the growth momentum in 2010-11 boosted revenues and improved the consolidated fiscal position of the States, as evident from the reduction in the key deficit-GDP ratios over the previous year. The growth in revenue receipts in 2010-11(RE) over 2009-10 (Accounts) more than offset the increase in revenue expenditure, which, together with a sharp increase in GDP, resulted in a narrowing of the revenue deficit-GDP (RD-GDP) ratio by 0.2 percentage point over the preceding year. The RD-GDP ratio in 2010-11(RE), however, remained unchanged over the budget estimates for the year. The GFD-GDP ratio in 2010-11(RE) was higher by 0.1 percentage point over the budget estimates, mainly on account of an increase in capital outlay.

Revenue receipts in 2010-11(RE) were higher than the budget estimates for the year due to higher States’ own tax revenue (OTR) as well as Central transfers to States. States’ OTR in 2010-11(RE) exceeded the budgeted levels, following higher collections from sales tax, stamp and registration fees, taxes and duties on electricity, state excise and taxes on vehicles. States also benefited from increased buoyancy in the Centre’s gross tax revenues and enhancement in the States’ share in shareable central taxes in accordance with the ThFC’s recommendation. Non-tax revenue of the States was higher in 2010-11(RE) reflecting higher grants from the Centre (Table 2 and Appendix Table 4). The States’ own non-tax revenue (ONTR) was, however, lower, mainly on account of lower receipts from ‘state lotteries’, ‘urban development’, and ‘dividends of State Public Sector Undertakings (PSUs)’.

Revenue expenditures in the revised estimates of 2010-11 were higher than the budget estimates, attributable to higher development expenditure, with social services contributing to over 52 per cent of the increase in total revenue expenditure. ‘Education, sports, art and culture’ and ‘relief on account of natural calamities’ were the major contributors to the increase in expenditure on social services. The increase in expenditure on economic services was led by ‘power’ and ‘transportation and communications.’ Nondevelopment revenue expenditure was also higher in 2010-11(RE) than the budget estimates on account of higher pension outgo, which more than offset the decline in expenditure on administrative services and interest payments.

GFD at the consolidated level was higher in 2010- 11(RE) than in 2010-11(BE) due to higher than the budgeted capital outlay, particularly in ‘energy’ and ‘transportation’; higher ‘net lending of the States’; and lower realisation of disinvestment proceeds than the budgeted level.

Table 1: Variation in Major Items – 2009-10 (Accounts) over 2009-10 (RE)
(Amount in ` billion)
Item	2009-10 (RE)	2009-10 (Accounts)	Variation		Share in variation* (Per cent)
	2009-10 (RE)	2009-10 (Accounts)	Amount	Per cent	Share in variation* (Per cent)
	1	2	3	4	5
I. Revenue Receipts (i+ii)	8,073.9	7,681.4	-392.5	-4.9	100.0
(i) Tax Revenue (a+b)	5,310.0	5,280.8	-29.3	-0.6	7.5
(a) Own Tax Revenue	3,655.3	3,630.6	-24.7	-0.7	6.3
of which: Sales Tax	2,252.3	2,206.4	-45.8	-2.0	11.7
(b) Share in Central Taxes	1,654.8	1,650.1	-4.7	-0.3	1.2
(ii) Non-Tax Revenue	2,763.8	2,400.6	-363.2	-13.1	92.5
(a) States’ Own Non-Tax Revenue	971.8	890.9	-80.9	-8.3	20.6
(b) Grants from Centre	1,792.1	1,509.7	-282.3	-15.8	71.9
II. Revenue Expenditure	8,540.5	7,991.5	-549.0	-6.4	100.0
of which:
(i) Development Expenditure	5,159.3	4,771.8	-387.5	-7.5	70.6
of which:
Education, Sports, Art and Culture	1,615.2	1,516.7	-98.5	-6.1	17.9
Transport and Communication	225.2	215.9	-9.3	-4.5	1.7
Power	342.5	313.3	-29.2	-8.5	5.3
Relief on account of Natural Calamities	103.8	84.1	-19.7	-19.0	3.6
Rural Development	296.4	288.3	-8.1	-2.7	1.5
(ii) Non-Development Expenditure	3,165.0	3,013.9	-151.1	-4.8	27.5
of which:
Administrative Services	712.5	675.0	-37.5	-5.3	6.8
Pension	872.7	831.6	-41.1	-4.7	7.5
Interest Payments	1,159.0	1,128.1	-31.0	-2.7	5.6
III. Capital Receipts	2,373.6	2,395.0	21.4	0.9	100.0
of which:
Non-Debt Capital Receipts	3.6	8.1	4.5	125.2	21.1
IV. Capital Expenditure	2,265.8	2,161.8	-104.0	-4.6	100.0
of which:
Capital Outlay	1,604.1	1,492.1	-111.9	-7.0	107.6
of which:
Capital Outlay on Irrigation and Flood Control	473.5	414.5	-59.0	-12.5	56.7
Capital Outlay on Energy	177.1	171.7	-5.4	-3.0	5.2
Capital Outlay on Transport	320.6	312.8	-7.8	-2.4	7.5
Memo Item:
Revenue Deficit	466.6	310.2	-156.5	-33.5
Gross Fiscal Deficit	2,161.0	1888.2	-272.8	-12.6
Primary Deficit	1,002.0	760.1	-241.9	-24.1
RE: Revised Estimates. * Denotes percentage share in relevant total. Note: 1. Negative (-) sign in deficit indicators indicates surplus. 2. Capital receipts include public accounts on a net basis while capital expenditure excludes public accounts. Source: Budget Documents of the State Governments.

Table 2: Variation in Major Items – 2010-11 (RE) over 2010-11 (BE)
(Amount in ` billion)
Item	2010-11 (BE)	2010-11 (RE)	Variation		Share in variation* (Per cent)
	2010-11 (BE)	2010-11 (RE)	Amount	Per cent	Share in variation* (Per cent)
	1	2	3	4	5
I. Revenue Receipts (i+ii)	9,130.4	9,680.7	550.3	6.0	100.0
(i) Tax Revenue (a+b)	6,271.5	6,734.2	462.7	7.4	84.1
(a) Own Tax Revenue	4,266.8	4,582.7	315.9	7.4	57.4
of which: Sales Tax	2,648.5	2,819.3	170.8	6.4	31.0
(b) Share in Central Taxes	2,004.7	2,151.5	146.8	7.3	26.7
(ii) Non-Tax Revenue	2,858.9	2,946.5	87.6	3.1	15.9
(a) States’ Own Non-Tax Revenue	1,026.1	979.0	-47.1	-4.6	-8.6
(b) Grants from Centre	1,832.8	1,967.5	134.7	7.4	24.5
II. Revenue Expenditure	9,374.1	9,932.5	558.4	6.0	100.0
of which:
(i) Development Expenditure	5,597.1	6,066.1	469.0	8.4	84.0
of which:
Education, Sports, Art and Culture	1,847.5	1,976.8	129.3	7.0	23.1
Transport and Communication	208.2	239.6	31.5	15.1	5.6
Power	333.1	369.8	36.8	11.0	6.6
Relief on account of Natural Calamities	53.2	119.6	66.4	124.8	11.9
Rural Development	335.0	356.3	21.3	6.4	3.8
(ii) Non-Development Expenditure	3,514.8	3,590.8	76.1	2.2	13.6
of which:
Administrative Services	831.9	803.9	-28.0	-3.4	-5.0
Pension	950.2	1,065.7	115.5	12.2	20.7
Interest Payments	1,286.6	1,269.5	-17.1	-1.3	-3.1
III. Capital Receipts	2,428.6	2366.0	-62.6	-2.6	100.0
of which:
Non-Debt Capital Receipts	31.6	9.6	-22.0	-69.7	35.1
IV. Capital Expenditure	2,371.8	2431.0	59.3	2.5	100.0
of which:
Capital Outlay	1,667.0	1704.0	37.0	2.2	62.4
of which:
Capital Outlay on Irrigation and Flood Control	492.7	459.7	-33.0	-6.7	-55.7
Capital Outlay on Energy	145.3	168.4	23.1	15.9	39.0
Capital Outlay on Transport	324.2	343.1	19.5	6.0	32.0
Memo Item:
Revenue Deficit	243.7	251.8	8.1	3.3
Gross Fiscal Deficit	1,985.4	2,066.7	81.3	4.1
Primary Deficit	698.8	797.2	98.4	41.1
BE: Budget Estimates. RE: Revised Estimates. * Denotes percentage share in relevant total. Note : See Notes to Table 1. Source : Budget Documents of the State Governments.

Budget Estimates: 2011-12

The consolidated revenue account of the States is budgeted to record a surplus in 2011-12, indicative of the return to the fiscal consolidation path as envisaged by the ThFC. The improvement in the revenue account is expected to provide the necessary resources for increased capital outlay while also contributing to a reduction in the GFD-GDP ratio by 0.5 percentage point in 2011-12(BE) over 2010-11(RE). In line with the budgeted decline in the GFD-GDP ratio, there is a reduction of 0.4 percentage point in the budgeted primary deficit, which bodes well for the long-run sustainability of State finances.

The consolidated States’ OTR as well as tax devolution from the Centre are, however, budgeted to decelerate during 2011-12 from their high growth rates of the previous year. Growth in non-tax revenue is also budgeted to decelerate in 2011-12 as compared with 2010-11(RE), primarily on account of a significant moderation in the growth of grants from the Centre. Barring receipts from the transport sub-sector, all other components of ONTR of the States are budgeted to grow at a slower pace in 2011-12 than the previous year.

Revenue receipts-GDP ratio is budgeted to remain unchanged in 2011-12 despite a marginal increase in the ratio of tax devolution from the Centre to GDP. On the non-tax revenue front, while States’ ONTR-GDP ratio is budgeted to marginally decline due to fall in interest receipts, the ratio of grants from the Centre to GDP is expected to remain stable at the previous year’s level. Among the non-tax resources of the States, the cost recovery of public services has been an important area of concern. While the cost recovery of services has improved over the years, it is budgeted to decline in 2011-12 for all important social and economic services, with the exception of the road sector.

The growth in consolidated revenue expenditure of the States is budgeted to decelerate substantially in 2011-12 as compared with 2010-11(RE), on account of deceleration in both development and non-development revenue expenditures. Within development revenue expenditure, social services are budgeted to record a sharper deceleration than economic services. Non development expenditure growth is budgeted to decelerate in 2011-12 under all major categories, barring economic services. Interest payments, which account for over one-third of the non-development revenue expenditure of the States, are budgeted to record a lower growth in 2011-12. Committed expenditure as a ratio of revenue receipts is, therefore, expected to decline to 31.5 per cent in 2011-12 (BE) from 32.4 per cent in 2010-11(RE).

Capital expenditure is budgeted to grow at a faster rate in 2011-12 mainly due to accelerated growth in capital outlay. Within development capital outlay, the growth in ‘medical and public health’ under social services and ‘major and medium irrigation’ under economic services are budgeted to increase at a faster rate than in 2010-11 (RE). Loans and advances by the States are budgeted to grow at a higher rate in 2011-12 (BE) than in 2010-11 (RE) mainly on account of a sharp increase in loans for social services.

The pattern of aggregate expenditure of the States in 2011-12 (BE) shows a marginal decrease in the share of development expenditure in total expenditure. This is attributable to a decline in the share of the revenue expenditure component, particularly in ‘relief on account of natural calamities’ under social services, and ‘power’ under economic services. The share of development capital outlay in total expenditure is, however, expected to increase in 2011-12 (BE) by 0.7 percentage point mainly on account of a sharp increase in the share of ‘major and medium irrigation and flood control’ under economic services.

Social sector expenditure by the States, which had declined both as a proportion of total expenditure as well as GDP during the fiscal consolidation phase, particularly in the initial years, has shown substantial improvement since 2008-09 on account of the renewed focus in this area, which constitutes one of the primary responsibilities of the States. Within social services, the shares of ‘education, sports, art and culture’, ‘urban development’, ‘welfare of SCs, STs and OBCs’, and ‘social security and welfare’ are expected to increase in 2011-12(BE) as compared with those in 2010-11(RE) (Appendix Table 5). It may be noted that apart from increased allocations, an improvement in efficiency and delivery of services is required to achieve the desired outcomes in the area of social services.

As the consolidated revenue account position of States is expected to revert to a surplus position in 2011-12 (BE) after a gap of two years, the decomposition of the consolidated GFD of the States has undergone a change. The surpluses in the revenue account have reduced borrowing requirements for meeting the expenditure on capital outlay and net lending. The share of non-debt capital receipts in GFD is expected to increase by 0.5 percentage point in 2011-12 (BE) over 2010-11(RE), mainly on account of the sale of land by a State (Karnataka) (Table 3 and Statement 1).

Table 3: Variation in Major Items - 2011-12 (BE) over 2010-11 (RE)
(Amount in ` billion)
Item	2010-11 (RE)	2011-12 (BE)	Variation		Share in variation* (Per cent)
	2010-11 (RE)	2011-12 (BE)	Amount	Per cent	Share in variation* (Per cent)
	1	2	3	4	5
I. Revenue Receipts (i+ii)	9,680.7	11,218.4	1,537.7	15.9	100.0
(i) Tax Revenue (a+b)	6,734.2	7,904.8	1,170.6	17.4	76.1
(a) Own Tax Revenue	4,582.7	5,395.9	813.1	17.7	52.9
of which: Sales Tax	2,819.3	3,340.3	521.0	18.5	33.9
(b) Share in Central Taxes	2,151.5	2,508.9	357.5	16.6	23.2
(ii) Non-Tax Revenue	2,946.5	3,313.7	367.2	12.5	23.9
(a) States’ Own Non-Tax Revenue	979.0	1,026.2	47.2	4.8	3.1
(b) Grants from Centre	1,967.5	2,287.5	319.9	16.3	20.8
II. Revenue Expenditure	9,932.5	11,021.4	1,088.9	11.0	100.0
of which:
(i) Development Expenditure	6,066.1	6,680.0	613.9	10.1	56.4
of which:
Education, Sports, Art and Culture	1,976.8	2,254.4	277.6	14.0	25.5
Transport and Communication	239.6	259.4	19.8	8.3	1.8
Power	369.8	380.2	10.4	208	1.0
Relief on account of Natural Calamities	119.7	81.3	-38.3	-32.0	-3.5
Rural Development	356.3	407.2	50.9	14.3	4.7
(ii) Non-Development Expenditure	3,590.8	4,019.1	428.3	11.9	39.3
of which:
Administrative Services	803.9	965.2	161.3	20.1	14.8
Pension	1,065.7	1,168.8	103.1	9.7	9.5
Interest Payments	1,269.5	1,401.3	131.8	10.4	12.1
III. Capital Receipts	2,366.0	2,750.8	384.8	16.3	100.0
of which:
Non-Debt Capital Receipts	9.6	20.4	10.9	113.9	3.3
IV. Capital Expenditure	2,431.0	2,876.0	445.0	18.3	100.0
of which:
Capital Outlay	1,704.0	2,027.5	323.5	19.0	72.9
of which:
Capital Outlay on Irrigation and Flood Control	459.7	583.6	124.0	27.0	27.9
Capital Outlay on Energy	168.4	162.7	-5.7	-3.4	-1.3
Capital Outlay on Transport	343.1	390.6	47.4	13.8	10.7
Memo Item:
Revenue Deficit	251.8	-197.0	-448.8	-178.2
Gross Fiscal Deficit	2,066.7	1,977.2	-89.5	-4.3
Primary Deficit	797.2	575.9	-221.3	-27.8
RE: Revised Estimates. BE: Budget Estimates. * Denotes percentage share in relevant total. Note : See Notes to Table 1. Source : Budget Documents of the State Governments.

Market borrowings would continue to remain the major source of financing of the GFD of the States. Its share in GFD financing, which had declined in 2010- 11(RE), is expected to increase sharply in 2011-12 on account of a decrease in the share of securities issued to the NSSF following an anticipated decline in small savings collections. As the revised estimates for 2010-11 show a significant drawdown of cash balances/cash investment accounts of the States to finance their GFD, a modest build up in the cash balances is budgeted for 2011-12, resulting in a negative contribution to GFD (Appendix Table 2 and 7). The share of loans from the Centre is expected to rise more than two-folds during 2011-12 (BE), although it will continue to remain a minor contributor in GFD financing.

Outstanding Liabilities and Market Borrowings of State Governments

The ThFC incentivised the States to amend their FRBM Acts and also recommended a path for the States to reduce their debt-GSDP ratios. Accordingly, States have amended FRBM Acts which, inter alia, set out their respective stipulated paths of graduated reductions in debt-GSDP ratios. The State governments have placed limits on the levels of debt-GSDP ratio to be achieved within a stipulated time frame, viz., by end-March 2015, recognising the adverse implications of high level of debt on future interest payments. Earlier, the debt relief mechanism prescribed by the Twelfth Finance Commission (TwFC) had helped States to contain the magnitude of outstanding liabilities by linking it to the adherence to rule-based fiscal consolidation (Statement 2).

As a result, the outstanding debt-GDP ratio could be contained at 25.5 per cent, i.e., much below the target of 30.8 per cent recommended by the TwFC for 2009-10. Not withstanding an increase in the outstanding level of debt of the States during 2010-11, the debt-GDP ratio continued to decline, reflecting the higher growth in nominal GDP. The consolidated debt-GDP ratio is budgeted to decline further to 22.5 per cent by end- March 2012, much below the recommended target (26.1 per cent) of the ThFC.

The continued emphasis on market borrowings to finance the gross fiscal deficit of State governments is reflected in the shift in the composition of States’ outstanding liabilities. While the share of market loans in the outstanding liabilities of State governments has increased gradually, the share of loans and advances from the Centre declined sharply from 1999-2000 onwards, with the change in accounting of loans against small savings². Market loans have been occupying the largest share in outstanding liabilities since end-March 2010.

The share of market loans in outstanding liabilities is expected to increase further to 37.1 per cent by end- March 2012. The share of securities issued to National Small Saving Fund (NSSF) in outstanding liabilities, which had remained the largest up to 2006-07, has declined persistently since end-March 2008 and is expected to be around 26 per cent by end-March 2012 (Appendix Table 8).

The share of public account items such as ‘State provident fund’, ‘reserve funds’ and ‘deposits and advances’ in total outstanding liabilities of the States has remained in the range of 25.3-26.9 per cent since 2005-06. Considering the burden arising from the high effective rate of interest on loans from Centre taken by States, the TwFC had recommended the Debt Consolidation and Relief Facility (DCRF) for its award period 2005-2010 on loans from centre, with the precondition that States enact their FRBMs. Although the DCRF came to an end on March 31, 2010, the exercise to assess States’ eligibility for debt waiver, based on their fiscal performance for the years 2008-09 and 2009-10, would be continued up to the end-March 2012.

In view of the sharp increase in the size as also the frequency of market borrowings by the State governments, the Reserve Bank took pro-active steps to manage the borrowing programme to contain excessive pressure on interest rates. The gross market borrowings raised by States in 2010-11 were lower by 21 per cent than those of the previous year. Reflecting the lower level of market borrowings, the growth in the outstanding stock of State Development Loans (SDLs) decelerated to 17 per cent during 2010-11 from the high growth rates witnessed during the crisis years of 2009-10 (29 per cent) and 2008-09 (35 per cent). It may be noted here that market borrowings were higher during 2008-09 and 2009-10 due to additional provisions allowed by the Centre. The interest rate profile of outstanding stock of SDLs shows that the share of high cost market loans (interest rate of 10.0 per cent and above) declined from 4.7 per cent as at end-March 2010 to 1.5 per cent as at end-March 2011. The share of loans with interest rates below 8 per cent which constituted over one-half of the total outstanding stock in end- March 2010 also declined to around 43 per cent in end-March 2011. The share of outstanding SDLs with interest rates ranging between 8-10 per cent, however, increased sharply from 45 per cent as at end-March 2010 to 56 per cent as at end-March 2011, which indicates that incremental debt was raised at a somewhat higher cost in 2010-11.

The weighted average yield of State government securities issued during 2010-11 stood higher at 8.39 per cent as compared with 8.11 per cent during 2009-10. During 2011-12 (up to March 6, 2012), 30 tranches of auctions were conducted under the market borrowing programme of the State governments and 24 States and UT of Puducherry raised an aggregate amount of `1,484 billion on a gross basis (net `1,292 billion) as compared with `985 billion (net `844 billion) raised by 22 States during the corresponding period of the previous year. The weighted average yield of gross market borrowings of States during 2011-12 (up to March 6, 2012) worked out to 8.76 per cent, i.e., higher than 8.39 per cent during the corresponding period of 2010-11.

The weighted average spread (i.e., the difference between the weighted average primary market yield of SDL on the day of auction and the secondary market yield of corresponding maturity of the Central government dated security on the same day) declined to 45 bps during 2010-11 from 86 bps during 2009-10. The lower spread during 2010-11 reflected several factors including lower market borrowings on account of the comfortable cash position of the States, lower average issuance size, and lower volatility in the yield of the 10-year benchmark government securities in the secondary market.

Keeping in view the surplus cash position of the State governments, the WMA limits of State governments have been left unchanged since 2006-07. The aggregate Normal WMA limit for States, including Government of Union Territory of Puducherry, was placed at `99 billion for 2010-11, which was the same as in the previous year. Consequent upon the supplementary agreement with the Government of Jammu and Kashmir, the aggregate WMA limit for 2011-12 was increased to `102 billion in April 2011. The rates of interest on Normal and Special WMA and OD continued to be linked to the repo rate. Most State governments have accumulated sizeable cash balances in recent years reflecting the fiscal consolidation measures undertaken since 2005-06. The liquidity pressures during 2010-11 were confined to a few State governments. Nonetheless, the monthly average utilisation of WMA and OD by the States in 2010-11 was higher. During 2011-12 (up to February, 2012), eight States resorted to WMA and four States availed of overdraft during the year. The daily average utilisation of WMA/OD by the States stood higher (`7 billion) during 2011-12 (up to February, 2012) as compared with `5 billion during the corresponding period of the previous year.

Most States continued to accumulate surplus cash balances although temporary dips were observed in some months. The surplus cash balances of State governments are automatically invested in 14-day Intermediate Treasury Bills (ITBs), the discount rate of which is fixed at one per cent less than the Bank Rate. The average investment in 14-day ITBs declined to `789 billion during 2010-11 from `845 billion during the previous year. The outstanding investments of States in ITBs stood at `1,013 billion as at end-March 2011 as against `938 billion as at end-March 2010. The average investment of the State governments in Auction Treasury Bills (ATBs) more than tripled to `96 billion in 2010-11 from `27 billion in the previous year. The outstanding investment of State governments in ATBs as at end-March 2011 was higher at `102 billion (`2.5 billion as at end-March 2010). Importantly, since mid- June 2010, States’ investments in ATBs have shown substantial increases, reflecting its positive return differential over ITBs. During 2011-12 (up to March 11, 2012), States’ investment in ITBs declined from `1,013 billion at the end of March 2011 to `852 billion as on March 11, 2012. However, States’ investment in ATBs increased from `102 billion to `327 billion during the period.

Table 4: Market Borrowings of State Governments
(` billion)
Item	2009-10	2010-11	2011-12*
Item	1	2	3
1. Net Allocation	1,024.6	1,421.6	1,458.7
2. Additional Allocation	26.8	59.7	0.0
3. Repayments	162.4	156.4	219.9
4. Gross Allocation (1+2+3)	1,213.8	1,637.7	1,678.6
5. Total Amount Raised	1,311.2	1,040.4	1484.4
6. Net Amount Raised (5-3)	1,148.8	884.0	1,292.4
Memo item:
(i) Coupon/Cut-off Yield Range (%)	7.04-8.58	8.05-8.58	8.36-9.33
(ii) Weighted Average Interest Rate (%)	8.1	8.4	8.8
(iii) Issuance Maturity (in years)	10.0	10.0	10.0
*Amount raised upto March 6, 2012. Note : (i) Data are inclusive of Puducherry. (ii) Data on market borrowings as per RBI records may differ from that reported in the budget documents of the State Governments. Source : Reserve Bank records.

Special Theme – Role of the Reserve Bank in State Finances

The theme chapter ‘Role of the Reserve Bank in State Finances’, traces the growing responsibilities of the Reserve Bank beyond its mandated roles of serving as a banker and debt manager of the State governments. Besides extending banking services to all the States except Sikkim, the Reserve Bank has been effectively balancing the short-term financing requirements of States consistent with its objective of maintaining monetary stability. The Reserve Bank stipulated and revised upwards the levels for the interest free minimum balances of the States, based on certain indicators reflecting expansion in State finances. At the same time, it also had to grant Special and Normal Ways and Means Advances to the States within specified limits to tide over temporary liquidity mismatches in their revenues and expenditures. The Reserve Bank revised the WMA Scheme for the State governments from time to time, taking into account their fiscal situation, financial and institutional developments,and the objective of co-ordinating monetary and fiscal policies. The WMA limits of the States, which were linked to minimum cash balances, are being determined based on volume of their budgetary transactions. With the repo rate becoming an indicator of short term policy rate and more reflective of market conditions, the interest rates on WMA (normal and special)/overdrafts which were earlier linked to the Bank Rate, have been linked to the repo rate since April 2006.

As a debt manager, the Reserve Bank has, over the years, created the enabling conditions for States to switch over to a full-fledged auction system for market borrowings. The Reserve Bank’s conduct of market borrowings of State governments has evolved sequentially from underwriting system in the initial period to the gradual switch-over to auction-based market borrowings. The switch-over to auction-based market borrowings was supported by structural reforms, liberalisation of the fi nancial markets, the phasing out of automatic monetisation of Centre’s fiscal deficit and the introduction of a rule-based fiscal framework at both the Central and State government levels.

As part of its proactive approach to State finances during the post-reform period, the Reserve Bank assumed responsibilities beyond its traditional role of serving as a banker and debt manager to the States. The Reserve Bank also played a pivotal role in facilitating the rule-based medium-term fiscal consolidation of the States and advising them on policy issues emerging from time to time to ensure fiscal sustainability. With a view to build cushions for repayments of loans and meeting obligations under guarantees extended by States, the Reserve Bank has been administering the scheme of Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF), respectively. It has also played an active role in designing ‘Model Fiscal Responsibility Legislation’ for the States, which paved the way for the introduction of fiscal rules at the State government level under their FRBM Acts. Several of these initiatives were the outcome of intensive discussions at the interactive platform provided by the Reserve Bank in the form of Conference of State Finance Secretaries.

Conclusion

With the turnaround to revenue surplus at the consolidated level, State finances were budgeted to show an improvement in their GFD-GDP ratio as also in debt-GDP ratio during 2011-12. However, GFD-GSDP ratio of States worked out to be higher than the ThFC target for 2011-12. The budgeted fiscal stance of the State governments during 2011-12 is generally in consonance with the revised road map of the ThFC. As the second phase of rule-based fiscal consolidation has commenced for the States from 2011-12, the underlying emphasis should not only be on reverting to a sustainable fiscal path but also in drawing lessons from the past and developing new perspectives to address the key challenges. There is also a need to deal with the different structural constraints, particularly for States which could not achieve fiscal consolidation. The strategy towards integrated management of the overall expenditure enveloping various functions of the government for facilitating desired outcomes, as recommended by the High Level Expenditure Committee on Public Expenditure, is welcome. Successful restructuring of the public expenditure management system would, however, call for appropriate assimilation of the new system across the government machineries at all levels. An important fiscal challenge for the States is significant increase in financial losses of the State power distribution utilities and the attendant requirement for reassessing their potential impact on State finances.

Appendix Table 1: Major Deficit Indicators of State Governments
(Amount in ` billion)
Year	Gross Fiscal Deficit	Revenue Deficit	Conventional Deficit	Primary Deficit	Net RBI Credit to States
Year	1	2	3	4	5
1990-91	187.9	53.1	-0.7	101.3	4.2
	(3.3)	(0.9)	(-0.0)	(1.8)	(0.1)
1991-92	189.0	56.5	1.6	79.6	-3.4
	(2.9)	(0.9)	(0.0)	(1.2)	(-0.1)
1992-93	208.9	51.1	-18.3	76.8	1.8
	(2.8)	(0.7)	(-0.2)	(1.0)	(0.0)
1993-94	203.6	38.7	3.6	45.6	5.9
	(2.4)	(0.4)	(0.0)	(0.5)	(0.1)
1994-95	273.1	67.1	-43.5	79.0	0.5
	(2.7)	(0.7)	(-0.4)	(0.8)	(0.0)
1995-96	308.7	86.2	-26.8	90.3	0.2
	(2.6)	(0.7)	(-0.2)	(0.8)	(0.0)
1996-97	365.6	168.8	72.0	111.8	9.0
	(2.7)	(1.2)	(0.5)	(0.8)	(0.1)
1997-98	434.7	174.9	-18.0	136.8	-19.4
	(2.8)	(1.1)	(-0.1)	(0.9)	-(0.1)
1998-99	733.0	444.6	32.7	378.5	55.8
	(4.2)	(2.5)	(0.2)	(2.2)	(0.3)
1999-00	901.0	545.5	31.3	454.6	13.1
	(4.6)	(2.8)	(0.2)	(2.3)	(0.1)
2000-01	879.2	553.2	-23.8	369.4	-10.9
	(4.2)	(2.6)	(-0.1)	(1.8)	(-0.1)
2001-02	942.6	604.0	35.5	326.7	34.5
	(4.1)	(2.7)	(0.2)	(1.4)	(0.2)
2002-03	997.3	571.8	-42.9	307.0	-31.0
	(4.1)	(2.3)	(-0.2)	(1.3)	(-0.1)
2003-04	1,206.3	634.1	-5.3	402.4	2.9
	(4.4)	(2.3)	(-0.0)	(1.5)	(0.0)
2004-05	1,077.7	391.6	-102.3	213.5	-27.1
	(3.3)	(1.2)	(-0.3)	(0.7)	(-0.1)
2005-06	900.8	70.1	-339.5	60.6	-38.4
	(2.4)	(0.2)	(-0.9)	(0.2)	-(0.1)
2006-07	775.1	-248.6	-163.2	-156.7	-11.5
	(1.8)	(-0.6)	(-0.4)	-(0.4)	(0.0)
2007-08	754.5	-429.4	-134.1	-243.8	11.4
	(1.5)	(-0.9)	(-0.3)	(-0.5)	(0.0)
2008-09	1,345.9	-126.7	-89.6	316.3	-16.1
	(2.4)	(-0.2)	(-0.2)	(0.6)	(-0.0)
2009-10	1,888.2	310.2	77.0	760.1	1.9
	(2.9)	(0.5)	(0.1)	(1.2)	(0.0)
2010-11 (BE)	1,985.4	243.7	186.9	698.8	–
	(2.6)	(0.3)	(0.2)	(0.9)	–
2010-11 (RE)	2,066.7	251.8	316.9	797.2	25.2
	(2.7)	(0.3)	(0.4)	(1.0)	(0.0)
2011-12 (BE)	1,977.2	-197.0	-71.8	575.9	–
	(2.2)	(-0.2)	(-0.1)	(0.6)	–
BE: Budget Estimates. RE: Revised Estimates. '–' Not Available. Note : 1. Negative (-) sign indicates surplus in deficit indicators. 2. Conventional deficit represents the difference between aggregate disbursements and aggregate receipts. Aggregate receipts include: (i) revenue receipts; (ii) capital receipts excluding Ways and Means Advances and Overdraft from RBI, and (iii) net receipts under Public Account excluding withdrawals from Cash Balance Investment Account and deposit with RBI. Aggregate disbursements include: (i) revenue expenditure and (ii) capital disbursements excluding repayments of Ways and Means Advances and Overdraft from RBI. 3. Revenue deficit is the difference between revenue expenditure and revenue receipts. 4. Gross fiscal deficit is aggregate disbursements (net of debt repayments) less revenue receipts, non-debt capital receipts and recovery of loans and advances. 5. Primary deficit is gross fiscal deficit less of interest payments. 6. Figures in parentheses are as percentage to GDP. 7. Figures in respect of Jammu and Kashmir from 1990-91 to 2009-10 and for Jharkhand from 2001-02 to 2009-10 relate to Revised Estimates. 8. The net RBI credit to State governments refers to variations in loans and advances given to them by the RBI net of their incremental deposits with the RBI. Source : Budget Documents of the State governments and the Reserve Bank records.

Appendix Table 2: Consolidated Budgetary Position at a Glance
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Variation
					Col.3 over Col.1		Col.3 over Col.2		Col.4 over Col.3
					Amount	Per cent	Amount	Per cent	Amount	Per cent
	1	2	3	4	5	6	7	8	9	10
I. Revenue Account
A. Receipts	7,681.4	9,130.4	9,680.7	11,218.4	1,999.3	26.0	550.3	6.0	1,537.7	15.9
B. Expenditure	7,991.5	9,374.1	9,932.5	11,021.4	1,941.0	24.3	558.4	6.0	1,088.9	11.0
C. Surplus(+)/Deficit(-) (IA-IB)	-310.2	-243.7	-251.8	197.0
II. Capital Account*
A. Receipts	2,395.0	2,428.6	2,366.0	2,750.8	-29.0	-1.2	-62.6	-2.6	384.8	16.3
B. Disbursements	2,161.8	2,371.8	2,431.0	2,876.0	269.3	12.5	59.3	2.5	445.0	18.3
C. Surplus(+)/Deficit(-) (IIA-IIB)	233.2	56.8	-65.0	-125.3
III. Aggregate Receipts	10,076.3	11,559.0	12,046.7	13,969.2	1,970.3	19.6	487.7	4.2	1,922.6	16.0
IV. Aggregate Disbursements	10,153.3	11,745.8	12,363.5	13,897.5	2,210.2	21.8	617.7	5.3	1,533.9	12.4
V. Overall Surplus(+)/ Deficit (-) (III-IV)	-77.0	-186.9	-316.9	71.8
VI. Financing of Overall surplus (+)/Deficit(-) [V=VI(A+B+C)]	-77.0	-186.9	-316.9	71.8
A. Increase (+)/Decrease (-) in Cash Balances (Net)	-3.9	-116.4	-93.4	6.1
B. Additions to (+)/ Withdrawals from (-)Cash Balance Investment Account (Net)	-72.4	-70.7	-222.7	65.4
C. Repayment of (+)/Increase in (-) Ways and Means Advances and Overdrafts from RBI (Net)	-0.7	0.3	-0.8	0.3
* Excluding (i) WMA from RBI, (ii) Purchase/Sale of Securities from Cash Balance Investment Account, and (iii) Deposit with RBI. Capital receipts include Public Accounts on a net basis while Capital Expenditure are given exclusive of Public Accounts. Note : Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. Source : Budget Documents of the State governments.

Appendix Table 3: Revenue Receipts
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Variation
					Col.3 over Col.1		Col.3 over Col.2		Col.4 over Col.3
					Amo unt	Per cent	Amo unt	Per cent	Amo unt	Per cent
	1	2	3	4	5	6	7	8	9	10
Total Revenue (I+II)	7,681.4	9,130.4	9,680.7	11,218.4	1,999.3	26.0	550.3	6.0	1,537.7	15.9
I. Tax Revenue (A+B)	5,280.7	6,271.5	6,734.2	7,904.8	1,453.4	27.5	462.7	7.4	1,170.6	17.4
A. Revenue from States’ Taxes (i to iii)	3,630.6	4,266.8	4,582.7	5,395.8	952.1	26.2	315.9	7.4	813.1	17.7
(i) Taxes on Income (a+b)	38.7	39.8	41.8	46.5	3.1	7.9	2.0	5.1	4.7	11.3
(a) Agricultural Income Tax	1.2	0.8	1.3	1.4	0.1	8.7	0.5	65.4	–	6.3
(b) Tax on Professions, Trades, Callings and Employment	37.5	39.0	40.4	45.1	2.9	7.9	1.5	3.8	4.6	11.4
(ii) Taxes on Property and Capital Transactions (a to c)	451.2	527.5	596.0	704.7	144.7	32.1	68.5	13.0	108.8	18.3
(a) Stamps and Registration Fees	395.8	460.4	521.9	622.0	126.1	31.9	61.5	13.4	100.1	19.2
(b) Land Revenue	51.5	59.4	68.6	76.3	17.1	33.3	9.2	15.5	7.7	11.2
(c) Urban Immovable Property Tax	4.0	7.6	5.4	6.4	1.5	37.5	-2.2	-28.8	0.9	17.7
(iii) Taxes on Commodities and Services (a to g)	3,140.7	3,699.6	3,945.0	4,644.6	804.3	25.6	245.4	6.6	699.6	17.7
(a) Sales Tax*	2,206.4	2,648.5	2,819.3	3,340.3	612.8	27.8	170.8	6.4	521.0	18.5
(b) State Excise Duties	483.7	554.8	576.5	697.7	92.7	19.2	21.7	3.9	121.2	21.0
(c) Taxes on Vehicles	191.4	215.6	228.0	280.1	36.6	19.1	12.4	5.8	52.1	22.8
(d) Taxes on Passengers and Goods	98.6	106.4	113.0	116.6	14.4	14.6	6.6	6.2	3.7	3.2
(e) Electricity Duties	122.3	135.2	165.5	160.7	43.2	35.4	30.3	22.4	-4.8	-2.9
(f) Entertainment tax	11.1	12.0	11.4	15.3	0.3	2.3	-0.6	-5.1	3.9	34.7
(g) Other taxes and duties	27.1	27.1	31.4	34.0	4.2	15.6	4.3	15.8	2.6	8.4
B. Share in Central Taxes	1,650.1	2,004.7	2,151.5	2,508.9	501.3	30.4	146.8	7.3	357.5	16.6
II. Non-tax Revenue (C + D)	2,400.6	2,858.9	2,946.5	3,313.7	545.9	22.7	87.6	3.1	367.1	12.5
C. Grants from the Centre	1,509.7	1,832.8	1,967.5	2,287.5	457.8	30.3	134.7	7.4	319.9	16.3
D. States’ Own Non-Tax Revenue (a to f)	890.9	1,026.1	979.0	1,026.2	88.1	9.9	-47.1	-4.6	47.2	4.8
(a) Interest Receipts	152.9	163.6	167.6	164.3	14.7	9.6	4.1	2.5	-3.3	-2.0
(b) Dividends and Profits	7.8	7.6	6.7	6.4	-1.1	-13.9	-0.8	-10.9	-0.3	-4.5
(c) General Services	241.2	276.0	208.3	185.6	-32.9	-13.6	-67.7	-24.5	-22.7	-10.9
of which: State Lotteries	57.5	65.6	56.0	20.3	-1.5	-2.6	-9.6	-14.6	-35.7	-63.8
(d) Social Services	90.8	113.9	121.8	139.6	31.0	34.1	7.9	7.0	17.8	14.6
(e) Economic Services	398.1	465.1	474.5	530.2	76.4	19.2	9.4	2.0	55.7	11.7
(f) Fiscal Services	–	–	–	–	–	-43.3	–	55.3	–	7.0
* Comprises General Sales Tax/VAT, Central Sales Tax, Sales Tax on Motor Spirit and Purchase Tax on Sugarcane, etc. '–' Negligible/Nil/Abnormal growth due to low base. Note : Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. Source : Budget Documents of the State governments.

Appendix Table 4: Devolution and Transfer of Resources from the Centre
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Variation
					Col.3 over Col.1		Col.3 over Col.2		Col.4 over Col.3
					Amount	Per cent	Amount	Per cent	Amount	Per cent
	1	2	3	4	5	6	7	8	9	10
I. States’ Share in Central Taxes	1,650.1	2,004.7	2,151.5	2,508.9	501.3	30.4	146.8	7.3	357.5	16.6
II. Grants from the Centre (1 to 5)	1,509.7	1,832.8	1,967.5	2,287.5	457.8	30.3	134.7	7.4	319.9	16.3
1. State Plan Schemes	708.5	923.8	958.3	1,139.7	249.7	35.2	34.4	3.7	181.4	18.9
2. Central Plan Schemes	64.5	71.2	69.9	59.4	5.3	8.3	-1.3	-1.8	-10.5	-15.0
3. Centrally Sponsored Schemes	258.8	451.4	452.3	479.8	193.5	74.8	0.9	0.2	27.5	6.1
4. NEC/Special Plan Schemes	7.0	10.0	11.6	9.2	4.7	67.0	1.7	16.6	-2.4	-20.9
5. Non-Plan Grants (a to c)	470.9	376.4	475.4	599.3	4.6	1.0	99.0	26.3	123.9	26.1
a) Statutory Grants	249.9	179.5	225.2	306.6	-24.8	-9.9	45.7	25.5	81.4	36.2
b) Grants for Natural Calamities	35.0	31.8	41.5	37.6	6.5	18.7	9.7	30.6	-3.9	-9.3
c) Non-Plan Non-Statutory Grants	186.0	165.1	208.8	255.1	22.8	12.3	43.6	26.4	46.3	22.2
III. Gross Loans from the Centre (i+ii)	81.1	154.5	133.9	179.2	52.9	65.2	-20.5	-13.3	45.2	33.8
i) Plan Loans	82.1	150.6	133.7	178.5	51.6	62.8	-17.0	-11.3	44.8	33.5
ii) Non-Plan Loans*	-1.1	3.8	0.2	0.7	1.3	-123.6	-3.6	-93.5	0.5	184.2
IV. Gross Transfer (I+II+III)	3,240.9	3,991.9	4,252.9	4,975.6	1,012.0	31.2	261.0	6.5	722.6	17.0
V. Repayment of Loans and Interest Payments Liabilities (a+b)	210.8	195.2	195.8	185.3	-15.0	-7.1	0.5	0.3	-10.5	-5.4
a) Repayment of Loans to the Centre	98.1	84.8	86.2	83.3	-11.9	-12.1	1.4	1.7	-2.9	-3.3
b) Interest Payments on the Loans from the Centre	112.7	110.5	109.6	101.9	-3.2	-2.8	-0.9	-0.8	-7.6	-7.0
VI. Net Transfer of Resources from the Centre (IV-V)	3,030.1	3,796.7	4,057.2	4,790.3	1,027.0	33.9	260.5	6.9	733.1	18.1
* Include Ways and Means Advances from the Centre. NEC: North Eastern Council. Note : Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. Source : Budget Documents of the State governments.

Appendix Table 5: Development Expenditure – Major Heads
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Percentage variation
	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Col.3 over Col.1	Col.3 over Col.2	Col.4 over Col.3
	1	2	3	4	5	6	7
I. Development Expenditure (Revenue and Capital) (A+B)	6,206.8	7,159.2	7,670.0	8,579.2	23.6	7.1	11.9
A. Social Services (1 to 11)	3,379.2	4,061.4	4,375.0	4,885.5	29.5	7.7	11.7
	(53.0)	(55.6)	(55.8)	(55.6)
1. Education, Sports, Art and Culture	1,558.2	1,904.4	2,045.9	2,331.0	31.3	7.4	13.9
2. Medical and Public Health and Family Welfare	423.4	503.0	530.1	590.3	25.2	5.4	11.4
3. Water Supply and Sanitation	206.8	206.0	218.4	231.1	5.6	6.0	5.8
4. Housing	67.9	105.3	110.7	123.7	63.1	5.2	11.7
5. Welfare of Scheduled Caste, Scheduled Tribes and Other Backward Classes	230.1	284.4	298.3	342.2	29.7	4.9	14.7
6. Labour and Labour welfare	34.0	45.0	46.7	52.4	37.2	3.8	12.3
7. Social Security and Welfare	336.5	395.5	435.5	498.8	29.4	10.1	14.5
8. Nutrition	112.3	151.3	161.5	166.0	43.8	6.7	2.8
9. Relief on account of Natural Calamities	84.1	53.2	119.6	81.3	42.3	124.8	-32.0
10. Urban development	289.4	368.1	359.5	423.9	24.2	-2.3	17.9
11. Others*	36.6	45.2	48.6	44.8	33.0	7.5	-7.9
B. Economic Services (1 to 9)	2,827.6	3,097.9	3,295.0	3,693.7	16.5	6.4	12.1
	(44.3)	(42.4)	(42.0)	(42.1)
1. Agriculture and Allied Activities	543.9	516.8	594.0	654.0	9.2	14.9	10.1
2. Rural Development	358.6	433.3	452.6	528.5	26.2	4.5	16.8
3. Special Area Programmes	40.7	66.9	73.7	72.1	81.2	10.1	-2.3
4. Irrigation and Flood Control	620.9	781.2	727.7	886.0	17.2	-6.8	21.7
5. Energy	487.1	481.5	542.5	547.1	11.4	12.7	0.8
6. Industry and Minerals	84.0	111.1	119.6	119.5	42.4	7.7	-0.1
7. Transport and Communications	528.7	533.5	584.5	651.0	10.5	9.6	11.4
8. Science, Technology and Environment	5.0	8.2	7.6	9.4	53.1	-7.3	24.3
9. General Economic Services	158.6	165.4	192.8	226.1	21.5	16.6	17.3
II. Loans and Advances by State Governments for Development	170.5	143.1	171.0	204.4	0.3	19.5	19.5
Purposes (A+B)
A. Social Services (1 to 7)	58.3	70.5	64.9	81.8	11.3	-7.9	26.2
	(0.9)	(1.0)	(0.8)	(0.9)
1. Education, Sports, Art and Culture	0.1	0.1	0.6	0.1	577.0	773.7	-76.1
2. Medical and Public Health	1.4	1.2	1.0	1.0	-29.3	-18.0	-1.3
3. Family Welfare	–	–	–	–	105.2	–	-100.0
4. Water Supply and Sanitation	14.6	21.0	18.7	22.2	28.1	-10.7	18.4
5. Housing	7.8	11.5	12.7	18.5	62.9	10.1	46.1
6. Government Servants (Housing)	5.7	8.6	8.0	9.1	40.3	-6.9	12.8
7. Others @	28.7	28.1	23.8	30.9	-16.9	-15.1	29.9
B. Economic Services (1 to 10)	112.2	72.6	106.2	122.6	-5.4	46.2	15.5
	(1.8)	(1.0)	(1.4)	(1.4)
1. Crop Husbandry	1.0	0.4	1.9	1.9	86.0	421.9	3.3
2. Soil and Water Conservation	–	–	–	–	–	–	–
3. Food Storage and Warehousing	19.7	8.3	9.6	10.2	-51.2	16.5	6.2
4. Co-operation	6.1	3.3	7.1	3.8	15.7	116.2	-46.6
5. Major and Medium Irrigation, etc.	–	–	–	–	–	–	–
6. Power Projects	60.8	41.4	59.4	74.9	-2.2	43.7	26.1
7. Village and Small Industries	1.1	1.0	1.0	0.8	-8.0	-5.9	-15.9
8. Other Industries and Minerals	3.4	7.9	9.9	11.6	191.5	25.4	16.7
9. Rural Development	–	0.8	0.1	0.1	121.6	-90.9	-20.5
10. Others+	20.1	9.6	17.2	19.3	-14.5	79.4	12.2
III. Total Development Expenditure (I + II)	6,377.3	7,302.3	7,841.0	8,783.6	23.0	7.4	12.0
	(100.0)	(100.0)	(100.0)	(100.0)
'–' Nil/Negligible. * Include expenditure on information and publicity. @ Include urban development, social security and welfare, etc. + Include forest, fisheries, animal husbandry, road and water transport services, etc. Note : 1. Figures in parentheses are percentage to total developmental expenditure. 2. Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. Source: Budget Documents of the State governments.

Appendix Table 6: Non-Development Expenditure – Major Heads
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Percentage variation
	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Col.3 over Col.1	Col.3 over Col.2	Col.4 over Col.3
	1	2	3	4	5	6	7
I. Non-Development Expenditure (General Services) on Revenue Account (i to vi)	3,013.9	3,514.8	3,590.8	4,019.1	19.1	2.2	11.9
i. Organs of State	87.4	95.1	119.6	125.7	36.9	25.7	5.1
ii. Fiscal Services	128.8	150.1	155.7	170.6	20.9	3.8	9.6
iii. Interest Payments and Servicing of Debt (1+2)	1,218.2	1,404.6	1,386.0	1,541.8	13.8	-1.3	11.2
1. Appropriation for reduction or avoidance of Debt	90.1	118.0	116.5	140.6	29.3	-1.3	20.7
2. Interest Payments	1,128.1	1,286.6	1,269.5	1,401.3	12.5	-1.3	10.4
iv. Administrative Services (1 to 5)	675.0	831.9	803.9	965.1	19.1	-3.4	20.1
1. Secretariat- General Services	55.8	69.5	37.0	64.2	-33.6	-46.8	73.5
2. District Administration	66.0	82.1	80.9	91.8	22.6	-1.4	13.5
3. Police	411.4	470.4	503.4	556.2	22.3	7.0	10.5
4. Public Works	58.3	71.5	74.4	75.1	27.6	4.1	1.0
5. Others*	83.5	138.4	108.2	177.7	29.6	-21.9	64.3
v. Pension	831.6	950.2	1,065.7	1,168.8	28.2	12.2	9.7
vi. Miscellaneous General Services	73.1	82.9	59.9	47.0	-18.0	-27.7	-21.6
II. Non-Development Expenditure on Capital Account (1+2)	61.5	110.2	105.5	135.8	71.5	-4.2	28.7
1. Non-Developmental (General Services)	57.2	104.9	100.1	128.3	75.1	-4.6	28.2
2. Loans for Non-Development Purposes (a+b)	4.4	5.2	5.4	7.5	23.5	3.1	38.8
a) Government Servants (other than housing)	3.9	4.4	4.6	6.2	19.7	5.1	34.3
b) Miscellaneous	0.5	0.8	0.8	1.3	53.0	-7.6	66.0
III. Total Non-Development Expenditure (I + II)	3,075.5	3,624.9	3,696.3	4,154.9	20.2	2.0	12.4
IV. III as percentage of Aggregate Receipts	30.5	31.4	30.7	29.7
V. III as percentage of Aggregate Disbursements	30.3	30.9	29.9	29.9
* Include expenditure on Public Service Commission, Treasury and Administration, Jails, etc. Note : Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. Source : Budget Documents of the State governments.

Appendix Table 7: Capital Receipts
(Amount in ` billion)
Item	2009-10 (Accounts)	2010-11 (Budget Estimates)	2010-11 (Revised Estimates)	2011-12 (Budget Estimates)	Variation
					Col.3 over Col.1		Col.3 over Col.2		Col.4 over Col.3
					Amo unt	Per cent	Amo unt	Per cent	Amo unt	Per cent
	1	2	3	4	5	6	7	8	9	10
Total Capital Receipts (1 to 10)	2,395.0	2,428.6	2,366.0	2,750.8	-29.0	-1.2	-62.6	-2.6	384.8	16.3
1. Internal Debt *	1,798.0	1,930.7	1,845.7	2,145.5	47.7	2.7	-85.0	-4.4	299.8	16.2
of which:
(i) Market Loans (Gross)	1,290.6	1,483.6	1,204.1	1,632.9	-86.5	-6.7	-279.5	-18.8	428.8	35.6
(ii) Special Securities issued to NSSF @	335.4	259.1	510.1	352.3	174.7	52.1	251.0	96.9	-157.8	-30.9
2. Loans from the Centre@	81.1	154.5	133.9	179.2	52.9	65.2	-20.5	-13.3	45.2	33.8
3. Recovery of Loans and Advances	80.9	42.1	56.0	44.8	-24.9	-30.8	13.9	33.0	-11.2	-19.9
4. Small Savings, Provident Funds,etc. (net)	231.4	224.3	227.6	257.8	-3.8	-1.6	3.4	1.5	30.2	13.3
5. Contingency Fund (net)	0.8	1.9	-0.6	2.0	-1.4	-178.7	-2.5	-132.7	2.6	-430.7
6. Reserve Funds (net)**	-19.9	37.4	25.0	65.1	44.9	-225.5	-12.4	-33.1	40.1	160.4
7. Deposits and Advances (net)***	123.7	35.7	38.8	33.6	-84.9	-68.6	3.1	8.8	-5.2	-13.3
8. Appropriation to Contingency Fund (net)	2.5	–	-5.2	4.0	-7.7	-306.0	-5.2	–	9.2	-177.7
9. Remittances (net)	29.7	88.7	88.0	-71.0	58.2	195.7	-0.7	-0.8	-159.0	-180.7
10. Others #	66.8	-86.5	-43.3	89.7	-110.2	-164.9	43.2	-49.9	133.0	-307.0
'–' Nil/Negligible/Abnormal growth due to low base. * Includes market loans, special securities issued to NSSF, land compensation bonds, cash credits and loans from State Bank of India and other banks (net) as also loans from National Rural Credit (Longterm Operations) Fund of the NABARD, National Co-operative Development Corporation, Life Insurance Corporation of India, Khadi and Village Industries Commission, etc, but excludes Ways and Means Advances and Overdrafts from the Reserve Bank of India. @ With the change in the system of accounting with effect from 1999-2000, States’ share in small savings which was included earlier under loans from the Centre is included under internal debt and shown as special securities issued to NSSF of the Central Government. Reserve funds (net) includes reserve funds bearing interest (like the depreciation reserve funds of Government Commercial Undertakings) as well as those not bearing interest (like sinking funds, famine relief fund and roads and bridges funds). * Deposits and advances (net) include deposits bearing interest ( like deposits of local funds) as well as those not bearing interest (like defence and postal deposits and civil advances). # Includes Suspense and Miscellaneous (net) and Inter-State Settlement (net) and Miscellaneous Capital Receipts. Note : 1. Figures for 2009-10 (Accounts) in respect of Jammu and Kashmir and Jharkhand relate to Revised Estimates. 2. Capital receipts include Public Accounts on a net basis. Source : Budget Documents of the State governments.

Appendix Table 8: Composition of Outstanding Liabilities of State Governments (As at end-March)
(Amount in ` billion)
Year	Market Loans	Power Bonds	Compensation and Other Bonds	NSSF	WMA from RBI	Loans from LIC	Loans from GIC	Loans from NABARD	Loans from SBI and Other banks
Year	1	2	3	4	5	6	7	8	9
1991	156.5	–	0.6	–	10.5	7.2	2.4	2.8	3.0
1992	190.1	–	0.6	–	12.9	7.8	2.7	1.5	6.0
1993	224.8	–	0.7	–	10.7	8.9	2.9	0.2	7.3
1994	261.2	–	0.8	–	13.1	10.4	3.8	-0.9	8.1
1995	312.0	–	0.8	–	6.1	11.3	4.2	-0.8	9.4
1996	370.9	–	0.8	–	18.9	12.6	5.0	2.9	11.7
1997	436.0	–	0.7	–	25.6	14.2	–	8.2	11.8
1998	508.5	–	0.8	–	6.3	16.8	–	20.4	14.0
1999	614.8	–	0.7	–	48.6	22.0	–	31.5	20.6
2000	754.3	–	0.7	252.5	73.3	31.0	–	43.7	31.8
2001	867.7	–	0.6	563.5	65.6	42.2	–	65.0	43.9
2002	1,040.3	–	0.6	902.3	94.2	50.9	–	89.7	71.4
2003	1,330.7	–	0.6	1,391.9	25.1	66.2	–	115.5	79.0
2004	1,799.2	289.8	0.8	1,984.5	33.8	89.7	10.1	112.9	82.2
2005	2,134.8	298.8	0.8	2,822.0	15.0	119.9	9.9	82.3	94.9
2006	2,289.2	315.8	0.8	3,659.3	4.1	126.1	9.9	116.5	96.8
2007	2,427.8	260.5	0.8	4,253.1	3.0	122.0	9.7	156.2	91.8
2008	2,985.1	231.4	0.8	4,308.8	2.5	115.3	9.3	208.7	93.0
2009	4,019.2	216.9	0.8	4,319.2	3.7	108.4	9.1	274.3	91.0
2010	5,157.9	187.8	0.8	4,550.2	4.8	97.0	8.8	348.1	101.6
2011 (RE)	6,040.9	144.2	0.8	4,946.4	5.6	91.1	8.8	438.2	57.1
2012 (BE)	7,454.5	115.2	0.8	5,121.3	5.3	89.1	8.8	526.6	38.6

Year	Loans from NCDC	Loans from other Instit utions	Loans from Banks and FIs	Total Internal Debt	Loans and Advances from Centre	Provident Funds, etc.	Reserve Fund	Deposit and Adva nces	Conti gency Fund	Out standing Liabilities
Year	10	11	12 = sum (6 to 11)	13 = sum (1 to 5) +12	14	15	16	17	18	19= sum (13 to 18)
1991	6.3	3.4	25.1	192.7	735.2	168.6	47.3	127.7	10.0	1,281.5
1992	8.1	3.0	29.1	232.7	829.8	197.9	55.2	145.0	9.7	1,470.3
1993	8.8	4.0	32.3	268.5	916.3	235.1	67.0	189.1	7.6	1,683.6
1994	8.9	3.9	34.3	309.3	1,011.2	279.7	81.8	190.1	6.6	1,878.7
1995	10.7	5.1	40.0	358.8	1,152.4	328.9	90.1	229.6	4.9	2,164.8
1996	11.0	5.2	48.4	439.0	1,292.6	382.2	105.8	266.5	9.3	2,495.3
1997	11.1	5.7	51.1	513.4	1,461.7	441.0	123.5	314.4	5.1	2,859.0
1998	11.1	15.1	77.3	592.9	1,686.6	508.4	145.0	366.1	9.2	3,308.2
1999	12.0	21.8	107.9	771.9	1,990.1	632.6	173.2	423.6	4.5	3,995.8
2000	13.5	51.1	171.1	1,251.8	2,303.3	805.2	197.7	521.9	15.3	5,095.3
2001	14.4	126.7	292.1	1,789.5	2,386.6	936.3	228.7	593.3	7.1	5,941.5
2002	16.2	180.8	408.9	2,446.3	2,495.5	1,038.2	273.9	643.2	10.4	6,907.5
2003	16.1	235.2	512.0	3,260.3	2,491.8	1,136.8	321.9	650.4	3.1	7,864.3
2004	30.7	334.1	659.6	4,767.7	1,929.8	1,218.4	422.2	691.2	2.5	9,031.7
2005	15.8	356.5	679.2	5,950.6	1,600.5	1,308.3	523.1	752.9	5.3	10,140.7
2006	12.0	357.2	718.5	6,987.7	1,570.0	1,408.1	631.2	866.9	13.2	11,477.2
2007	11.2	302.5	693.4	7,638.6	1,466.5	1,499.2	787.6	1,010.7	13.2	12,415.8
2008	11.8	276.4	714.4	8,243.0	1,451.0	1,619.7	782.6	1,165.9	20.7	13,283.0
2009	11.9	283.2	777.8	9,337.6	1,438.7	1,774.3	839.3	1,283.5	28.5	14,702.0
2010	13.2	266.0	834.8	10,736.3	1,431.5	2,005.6	943.5	1,345.3	24.3	16,486.5
2011 (RE)	13.7	215.1	824.0	11,962.0	1,479.3	2,233.2	968.5	1,384.1	23.7	18,050.8
2012 (BE)	14.9	168.5	846.5	13,543.6	1,575.1	2,491.0	1,033.6	1,417.7	25.7	20,086.8
RE: Revised Estimates. BE: Budget Estimates. '–' Not applicable/Not available/Negligible. Note : 1. From 1997 to 2003, ‘Loans from Other Institutions’ also includes ‘Other Loans’ and ‘Loans from GIC’. From 2004, ‘Loans from Other Institutions’ includes ‘Other Loans’. 2. As detailed break-up of Discharge of Internal Debt for Arunachal Pradesh and Jammu and Kashmir for 2010-11 (RE) and 2011-12 (BE) were not available, the same has been included under ‘Loans from Other Institutions’. Source : 1. Combined Finance and Revenue Accounts of the Union and State Governments in India, CAG. 2. Ministry of Finance, Government of India. 3. Reserve Bank Records. 4. Budget Documents of the State Governments. 5. Finance Accounts of the Union Government, CGA, Government of India.

Statement 1: Major Fiscal Indicators
(Per cent)
State	Revenue Deficit/ Gross Fiscal Deficit			Capital Outlay/ Gross Fiscal Deficit			Net Lending/ Gross Fiscal Deficit
	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)
	1	2	3	4	5	6	7	8	9
I. Non-Special Category
1. Andhra Pradesh	-8.8	-4.0	-21.7	98.5	90.5	101.4	10.3	13.5	20.3
2. Bihar	-55.8	-27.5	-101.3	139.0	118.2	184.8	16.8	9.3	16.4
3. Chhattisgarh	-50.5	-38.0	-35.3	156.1	129.0	132.9	-5.4	9.0	2.4
4. Goa	10.3	-29.6	10.3	87.7	128.9	89.1	2.0	0.8	0.6
5. Gujarat	46.0	34.7	-3.1	53.1	62.8	99.9	1.8	2.5	3.2
6. Haryana	42.3	51.0	33.2	51.7	42.5	57.9	6.1	6.7	9.0
7. Jharkhand	-146.6	2.9	-94.2	210.4	88.3	161.4	36.1	8.8	32.8
8. Karnataka	-14.9	-13.6	-10.2	111.6	102.5	110.2	3.9	12.6	16.1
9. Kerala	63.8	48.8	52.7	26.2	41.7	36.5	10.6	9.7	11.0
10. Madhya Pradesh	-88.7	-56.8	-48.4	127.8	114.7	109.3	61.2	46.3	39.2
11. Maharashtra	30.6	22.7	-0.3	66.6	75.2	98.4	2.9	2.1	1.9
12. Odisha	-50.3	6.5	-1.0	161.0	91.1	94.6	-10.8	2.4	6.5
13. Punjab	85.1	51.5	41.7	35.1	56.1	58.3	-20.2	-7.6	0.0
14. Rajasthan	46.1	11.8	-4.4	50.2	90.3	106.0	3.7	-1.9	-1.6
15. Tamil Nadu	29.9	17.8	-1.0	72.6	77.1	94.1	-2.5	5.1	7.0
16. Uttar Pradesh	-37.7	-6.4	-29.7	134.2	105.6	128.4	3.5	0.8	1.3
17. West Bengal	86.5	81.7	53.3	12.1	17.1	44.1	1.5	1.2	2.7
Total I	20.9	17.2	-3.5	74.0	76.9	96.0	5.3	6.2	8.7
II. Special Category
1. Arunachal Pradesh	-119.1	-2,365.4	-1,196.5	218.5	2,462.9	1,295.7	0.6	2.5	0.9
2. Assam	33.3	60.8	-32.1	65.0	38.6	129.6	1.6	0.6	2.5
3. Himachal Pradesh	28.9	8.5	-3.1	69.8	97.4	91.9	1.3	8.0	11.3
4. Jammu and Kashmir	-200.0	-439.3	-148.1	297.1	532.5	245.4	3.0	6.8	2.7
5. Manipur	-117.2	-145.8	-135.7	216.7	245.3	235.8	0.5	0.5	-0.2
6. Meghalaya	-117.1	-88.2	-150.0	212.7	184.3	232.2	4.4	3.8	17.8
7. Mizoram	-83.7	-2.3	-186.3	183.8	102.4	287.5	-0.1	-0.1	-1.2
8. Nagaland	-89.6	-289.6	-238.0	189.7	388.9	337.9	-0.1	0.7	0.1
9. Sikkim	-305.8	-91.7	-646.2	384.1	190.7	715.9	21.7	1.0	30.2
10. Tripura	1,900.3	-112.3	-229.2	-1,800.3	209.4	322.6	0.0	2.9	6.6
11. Uttarakhand	42.1	-37.6	-10.2	76.8	145.4	102.5	-1.2	2.1	7.7
Total II	-38.7	-44.4	-96.7	140.8	144.6	191.3	1.3	2.2	5.3
All States (I+II)	16.4	12.2	-10.0	79.0	82.5	102.5	5.0	5.8	8.5
Memo item:
1. NCT Delhi	-184.5	-590.9	-143.3	132.9	292.0	160.3	151.6	399.0	83.0
2. Puducherry	42.1	51.4	9.8	64.1	48.8	90.5	-0.5	-0.3	-0.3

Statement 1: Major Fiscal Indicators (Contd.)
(Per cent)
State	Non-Developmental Expenditure/ Aggregate Disbursement			Interest Payment/ Revenue Expenditure			State’s Own Tax Revenue/ Revenue Expenditure
	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)
	10	11	12	13	14	15	16	17	18
I. Non-Special Category
1. Andhra Pradesh	25.3	24.4	24.8	14.0	11.7	11.8	55.4	54.6	58.1
2. Bihar	29.2	28.2	30.7	11.3	10.2	9.5	24.8	24.1	25.2
3. Chhattisgarh	20.5	19.4	19.9	6.3	5.6	5.3	41.3	39.0	40.2
4. Goa	28.3	27.6	26.6	13.8	12.8	11.4	41.7	43.2	42.1
5. Gujarat	28.5	28.1	30.5	17.7	16.5	18.1	55.0	59.8	65.7
6. Haryana	24.7	26.5	26.4	10.8	11.1	12.6	52.3	54.1	57.7
7. Jharkhand	29.3	26.9	24.3	13.0	10.7	10.0	32.3	29.5	32.6
8. Karnataka	21.1	20.9	22.7	11.0	9.9	10.7	64.3	67.7	67.4
9. Kerala	39.1	37.3	36.1	17.0	15.4	13.9	56.6	61.1	59.3
10. Madhya Pradesh	24.3	24.5	26.8	12.4	10.6	9.9	48.1	42.6	42.9
11. Maharashtra	27.9	29.0	29.8	14.9	13.8	14.4	62.3	65.1	68.9
12. Odisha	31.0	29.9	30.5	12.0	12.0	11.1	35.5	32.3	33.9
13. Punjab	50.1	44.6	40.3	18.3	16.1	18.4	43.9	50.9	57.6
14. Rajasthan	30.9	30.9	29.8	16.9	15.8	15.4	40.9	41.4	41.1
15. Tamil Nadu	28.7	29.0	27.2	11.2	10.6	10.3	61.6	65.0	69.9
16. Uttar Pradesh	34.1	35.3	34.2	13.4	12.2	11.9	37.9	36.4	40.0
17. West Bengal	38.9	38.3	34.3	22.7	21.7	20.4	28.9	31.7	37.3
Total I	30.0	29.8	29.5	14.4	13.1	13.1	48.3	49.4	52.3
II. Special Category
1. Arunachal Pradesh	24.6	33.5	42.6	6.1	6.7	7.5	4.7	5.3	6.3
2. Assam	33.8	27.3	28.2	8.6	7.2	6.6	23.5	17.8	20.8
3. Himachal Pradesh	31.7	33.5	34.8	17.5	15.6	15.3	23.1	27.2	28.8
4. Jammu and Kashmir	34.0	34.4	39.0	13.4	12.4	10.5	20.4	20.1	18.6
5. Manipur	27.4	29.6	28.2	10.7	8.7	8.3	6.5	5.8	6.7
6. Meghalaya	30.4	25.0	23.7	7.4	6.6	5.9	14.0	11.4	11.8
7. Mizoram	28.1	27.0	30.5	9.4	7.0	7.9	4.0	3.4	5.1
8. Nagaland	39.3	35.7	40.9	11.1	9.2	9.6	5.5	4.9	5.5
9. Sikkim	47.2	40.3	39.4	5.6	6.3	5.9	8.1	7.5	8.3
10. Tripura	35.9	36.0	40.2	9.7	11.0	11.9	12.5	13.6	16.0
11. Uttarakhand	28.6	28.2	28.2	12.6	12.0	12.6	33.4	33.9	33.2
Total II	32.6	31.0	33.2	11.3	9.9	9.7	19.8	18.5	19.8
All States (I+II)	30.3	29.9	29.9	14.1	12.8	12.7	45.4	46.1	49.0
Memo item:
1. NCT Delhi	24.2	25.3	17.7	17.8	17.5	15.9	96.7	110.0	107.2
2. Puducherry	25.6	21.6	21.7	9.3	9.0	10.2	28.1	31.0	59.0

Statement 1: Major Fiscal Indicators (Concld.)
(Per cent)
State	State's Own Non-Tax Revenue/ Revenue Expenditure			Gross Transfers/ Aggregate Disbursement
	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)	2009-10 (Accounts)	2010-11 (RE)	2011-12 (BE)
	19	20	21	22	23	24
I. Non-Special Category
1. Andhra Pradesh	12.3	12.8	12.7	27.4	28.7	27.7
2. Bihar	5.1	2.9	6.0	62.0	62.7	65.8
3. Chhattisgarh	17.6	18.7	17.6	38.1	38.6	37.2
4. Goa	41.0	40.8	37.5	6.3	17.1	13.9
5. Gujarat	11.2	8.8	10.1	15.9	17.7	19.0
6. Haryana	10.9	11.8	12.4	15.9	17.9	20.1
7. Jharkhand	17.5	15.5	13.4	49.6	41.5	50.4
8. Karnataka	7.0	6.3	5.7	25.3	24.6	24.5
9. Kerala	5.9	6.2	5.6	20.1	20.8	21.4
10. Madhya Pradesh	17.8	12.5	11.1	38.1	43.2	44.4
11. Maharashtra	8.8	8.0	8.0	17.2	18.5	19.8
12. Odisha	12.7	10.1	10.5	47.2	49.4	46.3
13. Punjab	20.6	19.2	8.8	14.5	16.7	19.4
14. Rajasthan	11.4	12.4	12.4	30.1	37.1	39.6
15. Tamil Nadu	8.5	6.2	5.9	21.0	21.0	21.1
16. Uttar Pradesh	15.2	12.3	9.6	40.6	42.0	44.2
17. West Bengal	4.2	4.3	4.3	26.2	33.9	40.7
Total I	11.1	9.9	9.2	28.9	31.0	32.6
II. Special Category
1. Arunachal Pradesh	13.8	13.1	8.1	68.9	85.3	85.0
2. Assam	13.0	7.7	10.5	48.3	52.0	61.9
3. Himachal Pradesh	16.0	13.9	14.2	43.2	47.0	48.4
4. Jammu and Kashmir	8.6	8.1	7.2	67.6	71.8	67.9
5. Manipur	8.0	8.2	9.7	72.7	78.2	78.9
6. Meghalaya	8.6	6.4	7.9	71.2	74.7	74.5
7. Mizoram	4.7	4.8	6.9	78.3	72.0	79.7
8. Nagaland	3.9	3.5	4.1	75.5	83.9	81.5
9. Sikkim	49.5	37.3	39.6	47.7	52.6	60.1
10. Tripura	3.0	2.8	2.8	86.4	73.6	74.0
11. Uttarakhand	5.9	8.7	11.5	40.1	50.6	44.4
Total II	11.4	9.2	10.3	57.9	62.1	63.6
All States (I+II)	11.1	9.9	9.3	31.9	34.4	35.8
Memo item:
1. NCT Delhi	24.9	27.4	2.4	14.2	11.9	17.7
2. Puducherry	20.9	20.2	3.4	40.2	35.2	21.7
RE: Revised Estimates. BE: Budget Estimates. ‘–’ Nil/Negligible/Not applicable. Note : 1. Negative (-) sign indicates surplus in deficit indicators. 2. Figures for Jammu and Kashmir and Jharkhand for the year 2009-10 (Accounts) relate to Revised Estimates. Source : Budget Documents of the State Governments.

Statement 2: Total Outstanding Liabilities of State Governments (As at end-March)
(` billion)
State	1991	1992	1993	1994	1995	1996	1997
State	1	2	3	4	5	6	7
I. Non-Special Category
1. Andhra Pradesh	81.5	94.5	110.6	129.4	152.2	177.8	202.0
2. Bihar	106.3	117.8	135.5	147.5	167.0	187.0	207.5
3. Chhattisgarh	–	–	–	–	–	–	–
4. Goa	9.0	9.7	10.5	11.2	11.8	12.7	14.0
5. Gujarat	80.8	93.6	105.0	114.7	130.0	148.9	170.1
6. Haryana	30.8	34.7	39.0	44.2	50.4	61.7	70.0
7. Jharkhand	–	–	–	–	–	–	–
8. Karnataka	59.0	62.7	71.6	88.1	99.5	110.7	127.4
9. Kerala	49.8	58.3	66.8	76.0	92.8	107.2	123.1
10. Madhya Pradesh	77.8	88.0	114.4	107.9	121.6	138.9	159.5
11. Maharashtra	128.8	152.8	169.1	187.9	219.8	263.8	306.0
12. Odisha	51.6	60.7	67.9	76.9	89.1	102.9	120.0
13. Punjab	70.7	81.3	95.2	108.7	124.5	140.4	156.2
14. Rajasthan	65.8	76.5	86.5	100.4	118.7	141.4	167.4
15. Tamil Nadu	70.4	83.4	102.1	116.2	135.4	151.3	172.6
16. Uttar Pradesh	197.6	229.8	263.7	296.9	342.6	390.0	456.3
17. West Bengal	88.6	101.4	112.8	129.3	151.3	177.2	211.1
II. Special Category
1. Arunachal Pradesh	2.8	2.9	2.6	2.8	3.2	4.0	4.8
2. Assam	43.4	46.6	46.7	46.8	52.3	63.3	64.0
3. Himachal Pradesh	13.3	14.9	18.3	20.0	25.6	32.7	36.6
4. Jammu and Kashmir	33.6	38.1	40.1	45.1	44.5	46.3	52.9
5. Manipur	3.9	5.0	5.3	5.6	6.1	6.8	7.2
6. Meghalaya	2.2	2.4	3.0	3.8	4.5	4.9	4.7
7. Mizoram	3.3	3.1	3.2	3.8	4.4	5.4	5.7
8. Nagaland	4.1	4.8	5.2	5.9	6.2	7.8	7.5
9. Sikkim	1.4	1.6	2.0	2.2	2.6	2.9	2.3
10. Tripura	5.2	5.7	6.3	7.6	8.6	9.5	9.9
11. Uttarakhand	–	–	–	–	–	–	–
All States	1,281.5	1,470.3	1,683.6	1,878.7	2,164.8	2,495.4	2,859.0
Memo item:
1. NCT Delhi	–	–	–	1.2	6.3	13.5	22.0
2. Puducherry	–	–	–	–	–	–	–

Statement 2: Total Outstanding Liabilities of State Governments (Contd.) (As at end-March)
(` billion)
State	1998	1999	2000	2001	2002	2003	2004
State	8	9	10	11	12	13	14
I. Non-Special Category
1. Andhra Pradesh	233.1	283.0	348.3	418.1	486.4	560.3	652.5
2. Bihar	235.8	271.1	328.7	299.4	341.3	382.5	400.0
3. Chhattisgarh	–	–	–	69.7	81.2	95.9	108.2
4. Goa	15.7	19.4	25.1	28.2	37.5	35.0	38.9
5. Gujarat	204.2	250.7	341.9	427.8	479.2	551.7	623.1
6. Haryana	81.1	102.5	138.1	146.5	177.3	199.5	224.5
7. Jharkhand	–	–	–	84.5	99.8	118.9	100.4
8. Karnataka	147.0	174.5	210.5	253.0	313.4	360.2	399.6
9. Kerala	144.7	173.3	222.1	262.6	295.4	343.1	391.5
10. Madhya Pradesh	179.8	219.6	259.3	221.3	260.4	298.8	379.7
11. Maharashtra	370.5	442.6	588.1	676.0	785.4	899.5	1,068.4
12. Odisha	136.4	162.8	206.1	242.2	281.6	308.7	338.5
13. Punjab	179.0	218.2	266.1	307.6	357.3	401.2	428.2
14. Rajasthan	192.3	241.4	316.8	355.4	416.3	475.3	531.1
15. Tamil Nadu	195.1	231.9	295.7	345.4	390.7	444.7	517.6
16. Uttar Pradesh	524.3	621.0	779.3	831.0	958.2	1,051.3	1,240.6
17. West Bengal	251.7	321.9	440.4	549.3	664.0	783.2	894.7
II. Special Category
1. Arunachal Pradesh	4.8	5.7	7.4	7.4	7.9	9.7	17.4
2. Assam	64.7	67.7	86.7	102.3	119.9	131.0	156.9
3. Himachal Pradesh	43.0	63.8	78.4	87.0	100.6	122.3	143.8
4. Jammu and Kashmir	57.4	64.3	77.4	91.0	96.2	105.3	147.3
5. Manipur	10.4	13.3	16.1	18.7	18.7	18.9	24.4
6. Meghalaya	6.6	8.6	11.2	13.9	15.3	18.2	21.2
7. Mizoram	7.7	8.4	11.8	13.8	17.1	19.7	26.1
8. Nagaland	8.8	10.6	13.9	16.0	18.8	23.9	23.9
9. Sikkim	2.6	4.2	5.9	8.5	9.3	9.9	10.1
10. Tripura	11.6	15.3	19.9	23.8	28.2	32.8	40.6
11. Uttarakhand	–	–	–	41.1	50.2	62.7	82.7
All States	3,308.2	3,995.8	5,095.3	5,941.5	6,907.5	7,864.3	9,031.7
Memo item:
1. NCT Delhi	30.8	37.9	63.5	79.2	97.8	124.9	141.5
2. Puducherry	–	–	–	–	–	–	13.1

Statement 2: Total Outstanding Liabilities of State Governments (Concld.) (As at end-March)
(` billion)
State	2005	2006	2007	2008	2009	2010	2011(RE)	2012(BE)
	15	16	17	18	19	20	21	22
I. Non-Special Category
1. Andhra Pradesh	754.2	832.8	904.6	998.7	1,100.5	1,236.8	1,360.1	1,538.4
2. Bihar	431.8	472.9	498.5	528.1	557.8	595.1	643.5	706.6
3. Chhattisgarh	121.3	131.9	140.4	146.5	150.3	162.5	171.2	205.6
4. Goa	44.2	51.3	58.4	66.4	71.5	84.3	90.9	97.6
5. Gujarat	713.3	830.2	909.6	1,003.3	1,098.6	1,234.7	1,385.9	1,528.9
6. Haryana	249.0	269.8	293.1	299.1	335.0	410.2	469.3	555.6
7. Jharkhand	130.9	169.2	190.5	213.4	240.2	269.8	293.1	339.0
8. Karnataka	443.5	495.9	580.8	605.6	652.2	845.3	902.4	1,017.2
9. Kerala	436.9	478.8	523.2	585.0	670.1	754.5	826.1	930.1
10. Madhya Pradesh	445.9	496.5	527.3	549.1	603.1	679.2	738.3	828.2
11. Maharashtra	1,245.5	1,462.3	1,607.4	1,620.1	1,866.7	2,034.4	2,252.0	2,484.6
12. Odisha	369.8	407.2	429.4	429.8	439.0	457.2	482.9	532.9
13. Punjab	470.7	511.4	510.1	557.9	615.3	677.8	740.2	823.5
14. Rajasthan	599.7	662.4	711.7	771.7	842.4	917.5	991.9	1,072.3
15. Tamil Nadu	559.7	638.5	685.6	738.9	861.5	1,017.1	1,138.3	1,325.9
16. Uttar Pradesh	1,362.7	1,540.6	1,677.8	1,797.4	1,927.7	2,064.3	2,240.1	2,445.1
17. West Bengal	973.4	1,144.2	1,241.5	1,364.2	1,504.3	1,755.1	1,934.1	2,115.9
II. Special Category
1. Arunachal Pradesh	20.7	24.1	23.7	28.4	59.3	31.6	34.4	38.8
2. Assam	170.4	184.0	194.9	201.9	228.0	256.1	273.3	310.6
3. Himachal Pradesh	164.8	173.9	181.4	194.8	219.0	237.7	250.4	266.8
4. Jammu and Kashmir	158.8	184.3	196.7	221.0	250.8	301.2	336.4	365.1
5. Manipur	32.4	40.6	41.9	45.3	48.8	55.8	61.5	70.6
6. Meghalaya	24.1	26.1	28.2	32.2	37.0	39.4	43.1	48.4
7. Mizoram	29.2	31.5	33.5	39.5	41.5	37.8	43.1	46.0
8. Nagaland	26.4	30.1	32.2	35.8	41.8	55.0	52.2	56.4
9. Sikkim	11.5	12.9	14.1	17.1	20.2	24.8	25.7	27.1
10. Tripura	48.5	53.6	46.2	45.4	47.1	54.5	59.1	62.9
11. Uttarakhand	101.2	120.2	133.1	146.5	172.2	196.5	211.2	236.3
All States	10,140.7	11,477.2	12,415.8	13,283.0	14,702.0	16,486.5	18,050.8	20,086.8
Memo item:
1. NCT Delhi	158.4	215.7	255.7	253.4	253.8	265.4	301.4	305.4
2. Puducherry	15.5	18.2	21.7	29.2	33.3	39.4	55.5	65.8
RE : Revised Estimates. BE: Budget Estimates. ‘–’ Not available/Not applicable. Note : 1. For state-wise data series on outstanding liabilities prior to 2008-09, please refer to ‘Handbook of Statistics on State Government Finances 2010’. 2. As detailed break-up of Discharge of Internal Debt for Arunachal Pradesh and Jammu and Kashmir for 2010-11 (RE) and 2011-12 (BE) were not available, the same has been included under ‘Loans from Other Institutions’. Source : 1. Combined Finance and Revenue Accounts of the Union and State Governments in India, CAG. 2. Ministry of Finance, Government of India. 3. Reserve Bank Records. 4. Budget Documents of the State Governments. 5. Finance Accounts of the Union Government, CGA, Government of India.

* Prepared in the Fiscal Analysis Division of the Department of Economic and Policy Research (DEPR) with inputs from Regional Offices of DEPR. Support was also received from Department of Government and Bank Accounts (DGBA) and Internal Debt Management Department (IDMD) of the Reserve Bank. The technical support received from Finance Departments of the 28 State governments, governments of NCT Delhi and Puducherry and valuable inputs received from the Ministry of Finance, Government of India, Planning Commission and office of Comptroller and Auditor General (CAG) of India, New Delhi are gratefully acknowledged.

¹ The report ‘State Finances: A Study of Budgets of 2011-12’ is available on the Reserve Bank’s website (www.rbi.org.in).

² States’ share in small savings which was earlier included under loans from the Centre is included under internal debt and shown as special securities issued to National Small Savings Fund (NSSF) of the Central Government.

RBI Bulletin

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

Archives

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1947-1996