The rating firm said the state government’s capital expenditure is projected to decline to 13 per cent growth in FY2025 from 19 per cent growth in FY23-24 due to a slow start and lower revenues. ikra,
The rating firm said that along with this, some states including Maharashtra have fiscal space to increase welfare schemes.
Icra estimates 12.6 per cent expansion in combined capital expenditure sample status In FY 2025, this is lower than the 24 percent growth projected in the FY 25 budget of these sample states and lower than the 19.6 percent growth seen in the FY 2024 provisional actual.
“With a contraction of 13.5 percent Capital expenditure “Due to heavy rains in some states during the first four months of FY2025 and second quarter of FY2025, capital expenditure by states is set for a back-ended surge in the second half of FY2025” Aditi Nair, Chief Economist , said the chief. Research and Outreach, ICRA.
ICRA assesses that Gujarat, Karnataka, Maharashtra and Tamil Nadu have sufficient fiscal space to meet their needs budgetary capital expenditure Some undershooting is expected in FY2025 and by the remaining sample states.
ICRA’s sample includes Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal. The share of these states in India’s GDP in FY 2023 was 82%.
Commenting on concerns raised over the fiscal impact of populist schemes in Maharashtra such as the Ladki Bahin scheme to provide cash to women or the decision to discontinue toll for cars during entry or exit into the financial capital, Nair Said that the state has adequate financial support. The debt levels at the place and state are among the lowest to accommodate such a scheme.
ICRA also expects a slight decline in combined Fiscal deficit Out of 13 states Rs. Rs 8.8 lakh crore in financial year 2025. Estimate of Rs 8.5 lakh crore in the budget. The fiscal deficit will be financed by a mix of market borrowings and funds under the Special Assistance Scheme to States capital investments,
