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Motilal Oswal Report
Based on the provisional data of 20 states (together accounting for 90% of all states), total receipts of all states grew at a 14-quarter lowest rate of 2.4% YoY in Q1 FY25 (versus 15.0% YoY in Q1 FY24), implying 19.1% of budget estimates in the first quarter (versus 20% in Q1 FY24).
At the same time, their total spending grew 5.6% YoY in Q1 FY25, same as in Q4 FY24 and the slowest growth in the past four years. As a result, states’ aggregate fiscal deficit was 11.3% of BEs in Q1 FY25, the highest in last three years during the corresponding period.
In other words, their aggregate fiscal deficit came in at Rs 1.1 trillion in Q1 FY25 (or 1.5% of GDP), higher than Rs 0.8 trillion (or 1.2% of GDP) in Q1 FY24.
An analysis of individual states suggests that five states – Chhattisgarh, Jharkhand, Maharashtra, Odisha and Uttar Pradesh – reported a fiscal surplus in Q1 FY25.
As many as eight states posted a fiscal surplus in Q1 FY24, including all mentioned above, except CT. In contrast, four states – Andhra Pradesh, Kerala, Punjab and Tamil Nadu – posted a fiscal deficit of more than 25% of BEs in Q1 FY25, with the highest deficit of 57% of BEs in AP (72% of BEs in Q1 FY24).
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