Lok Sabha Question No. 2839 (UNSTARRED), answered on 2018-12-28
Subject: Fiscal Consolidation Targets of States
Ministry: FINANCE
Asked by: A. ARUNMOZHITHEVAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION NO.  2839 TO BE ANSWERED ON FRIDAY, 28 th  December, 2018 7 PAUSHA, 1940 (SAKA)

## Fiscal Consolidation Targets of States

## 2839. SHRI A. ARUNMOZHITHEVAN:

Will the Minister of FINANCE be pleased to state:

- a) whether  the  States  are  set  to  miss  their  fiscal  consolidation  targets  budgeted  at  the beginning of the year and if so, the reasons therefor;
- b) whether  the  States  fiscal  deficit  is  primarily  financed  by  issuing  State  Development Loans (SDLs) and if so, the details thereof; and
- c) whether Rs. 1.3 lakh crore of SDLs scheduled to be redeemed in the financial year 2019 are much higher than Rs. 0.8 lakh crore redeemed in the financial year 2018 and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PON. RADHAKRISHNAN)

(a) & (b) As per the report issued by Reserve Bank of India (RBI) titled 'State Finances: A Study of Budgets of 2017-18 and 2018-19', the States have budgeted for a revenue surplus in 2018-19 and a lower fiscal deficit. Going forward, fiscal risk may emanate for many states going for election during the year, continuing announcements and rollouts of farm loan waivers as well as the implementation of the pay commission awards by some states.

The  States'  gross  fiscal  deficit  is  financed  by  various  sources  of  borrowings,  including  open market  borrowings  (OMBs)/  state  development  loans  (SDLs),  negotiated  loans  from  financial institutions, National Small Saving Fund loans, Central Government loans including EAPs, etc. Further,  as  per  this  report  issued  by  RBI,  the  OMBs/  SDLs  of  all  States  were  65.8% of  gross fiscal  deficit  in  2016-17  which is  estimated to  be increased to 74.9% of gross fiscal deficit in 2017-18(RE).

(c) The  State  wise  details  of  State  Development  Loans  (SDLs)  redeemed  in  2017-18  and 2018-19 are at Annexure.

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## Annexure to reply to part (c) of Lok Sabha Unstarred question no. 2839 for 28.12.2018 Redemption of State Development Loans of States

(Rs. in crore)

| State             | 2017-18   | 2018-19   |
|-------------------|-----------|-----------|
| Andhra Pradesh    | 3,878     | 6,377     |
| Arunachal Pradesh | 185       | 26        |
| Assam             | 963       | 2506      |
| Bihar             | 1,092     | 3,397     |
| Chhattisgarh      | -         | -         |
| Goa               | 400       | 500       |
| Gujarat           | 8,215     | 9,534     |
| Haryana           | 800       | 3,295     |
| Himachal Pradesh  | 2,049     | 2,102     |
| Jammu and Kashmir | 2,226     | 1,757     |
| Jharkhand         | 1,192     | 1,486     |
| Karnataka         | 4,750     | 7,417     |
| Kerala            | 4,297     | 5,516     |
| Madhya Pradesh    | 1,875     | 4,495     |
| Maharashtra       | 8,520     | 17,762    |
| Manipur           | 247       | 303       |
| Meghalaya         | 196       | 259       |
| Mizoram           | 147       | 123       |
| Nagaland          | 369       | 467       |
| Orissa            | -         | 1000      |
| Punjab            | 4,121     | 5,061     |
| Rajasthan *       | 8,137     | 12,992    |
| Sikkim            | 250       | 293       |
| Tamil Nadu        | 4,942     | 10,848    |
| Telangana         | 2,772     | 4557      |
| Tripura           | -         | 156       |
| Uttar Pradesh     | 4,422     | 12,693    |
| Uttarakhand       | 830       | 1,011     |
| West Bengal       | 11,607    | 12,397    |
| Total (States) -A | 78,482    | 1,28,330  |
| Puducherry (B)    | 337       | 350       |
| Grand Total (A+B) | 78,819    | 1,28,680  |