Foreword

List of Abbreviations

Chapter I: Overview

1. Introduction

2. Preview

Chapter II: Issues and Perspectives

1. Introduction

2. Fiscal Transparency at the State Government level

3. Tax Efforts by the States

4. Quality of State Government Expenditure

5. Social Sector Expenditure and Human Development

6. Financial Viability of State Power Distribution Companies: Impact on State Finances

7. Supply Chain Management and Food Inflation  

8. Surplus Cash Balances

9. Conclusion  

Chapter III: Policy Initiatives

1. Introduction

2. State Governments

3. Government of India

4. Reserve Bank of India

5. Conclusion  

Chapter IV: Fiscal Position of State Governments

1. Introduction

2. Accounts: 2010-11  

3. Revised Estimates: 2011-12

4. Budget Estimates: 2012-13  

5. Assessment

6. Conclusion

Chapter V: Outstanding Liabilities, Market Borrowings and Contingent Liabilities of State
Governments

1. Introduction

2. Outstanding Liabilities

3. State-wise Debt Position

4. Market Borrowings  

5. Contingent Liabilities

6. Liquidity Position and Cash Management

7. Investment of Cash Balances

8. Debt Consolidation and Relief

9. Conclusion

Chapter VI: Sub-National Debt Sustainability: An Assessment of the State Governments

1. Introduction

2. Definition and Measurement of State Government Debt

3. Evolution of Debt of the State Governments in India

4. Role of Finance Commissions in States’ Debt Sustainability

5. Central Government Measures to restructure States’ Debt

6. Role of Fiscal Rules in Debt Sustainability

7. Fiscal Implications of Contingent Liabilities of the States

8. Assessing Debt Sustainability at the SNGs Level

9. Concluding Observations and the Way Forward

ANNEX

Debt Targets Set in Fiscal Responsibility and Budget Management Acts of the States

References

Explanatory Note on Data Sources and Methodology

LIST OF BOXES

II.1 Tax Efforts of the States

II.2 Social Sector Expenditure and Human Development – An Empirical Exercise

II.3 Scheme for Financial Restructuring of State Power Distribution Companies (Discoms)

VI.1 Fiscal Rules at the Sub-National Level

VI.2 Sustainability of Sub-National Government Debt

LIST OF TABLES

III.1 Institutional Reforms by State Governments

III.2.a Revenue Deficit as percentage of GSDP for 2013-14 & 2014-15: Comparison with FC-XIII Targets

III.2.b Revenue Deficit as percentage of Total Revenue Receipts for 2013-14 & 2014-15

III.3 Fiscal Deficit for 2013-14 & 2014-15: Comparison with FC-XIII Targets

III.4 Assumption Regarding Growth Rate of GSDP

IV.1 Major Deficit Indicators of State Governments

IV.2 Fiscal Imbalances in Non-Special and Special Category States  

IV.3 Deficit Indicators of State Governments

IV.4 Aggregate Receipts of State Governments

IV.5 Expenditure Pattern of State Governments

IV.6 Variation in Major Items - 2010-11 (Accounts) over 2010-11 (RE)

IV.7 Contribution of VAT on Petroleum Products in Total Revenue from VAT

IV.8 Variation in Major Items 2011-12 (RE) over 2011-12 (BE)

IV.9 Variation in Major Items 2012-13 (BE) over 2011-12 (RE)

IV.10 Revenue Receipts of State Governments

IV.11 Cost Recovery of Select Services

IV.12 Revenue Expenditure of the State Governments

IV.13 Interest Payments, Pension and Committed Expenditure

IV.14 Components of Development Expenditure

IV.15 Development Expenditure: Select Indicators

IV.16 Trends in Aggregate Social Sector Expenditure of State Governments

IV.17 Composition of Expenditure on Social Services (Revenue and Capital Accounts)

IV.18 State-wise Correction of RD and GFD 2012-13 (BE) over 2011-12 (RE)

IV.19 Decomposition and Financing Pattern of Gross Fiscal Deficit 2010-11 Accounts to  2012-13 (BE)

IV.20 Budgetary Data Variation- State Budgets and Union Budget

IV.21 Performance of the States vis-à-vis FC-XIII Assessment

IV.22 Deficit Indicators in Comparison with FC-XIII Targets

V.1 Outstanding Liabilities of State Governments  

V.2 Share in the NSSF collections to be Availed by States/UTs in 2012-13

V.3 Composition of Outstanding Liabilities of State Governments (As at end-March)

V.4 State-wise Debt-GSDP Position

V.5 Interest Rate Profile of the Outstanding Stock of State Government Securities

V.6 Market Borrowings of State Governments

V.7 Maturity Profile of Outstanding State Government Securities (As at end-March  2012)

V.8 Average Interest Rate on Outstanding Liabilities of State Governments

VI.1 Comparison of Measurement of Outstanding Liabilities of States as at end of 2004-05

VI.2 Key Fiscal Indicators of States in various phases

VI.3 Outstanding Liabilities of States (As at end-March)

VI.4 Debt Relief Measures Recommended by the Finance Commissions

VI.5 State-wise amounts adjusted under the Debt Swap Scheme (DSS) during 2002-03  to 2004-05

VI.6 Summary of Performance under the DCRF

VI.7 State-wise Debt Relief and Interest Relief on Account of the DCRF

VI.8 Fiscal Sustainability of States: An Indicator Analysis

VI.9A States Vulnerability Matrix -Non-Special Category

VI.9B States’ Vulnerability Matrix -Special Category  

LIST OF CHARTS

II.1 Growth in Per Capita Social Sector Expenditure (PCSSE) and HDI

IV.1 Value Added Tax in Non-Special and Special Category States

IV.2 Trend in Interest Receipts

IV.3 Composition of Committed Expenditure

V.1 Utilisation of WMA and Overdraft by States (Average Monthly Outstanding)

V.2 Investments in ATBs and ITBs by State Governments/UTs

VI.1 Deficit, Debt and Interest Burden of State governments

VI.2 Composition of Financing Pattern of States’ fiscal deficits

VI.3 Average Interest Rate on Outstanding Debt of State Governments

LIST OF APPENDIX TABLES

1 Major Deficit Indicators of State Governments

2 Consolidated Budgetary Position at a Glance  

3 Revenue Receipts  

4 Revenue Expenditure

5 Capital Receipts

6 Capital Disbursements

7 Devolution and Transfer of Resources from the Centre  

8 Development and Non-Development Expenditure

9 Development Expenditure - Major Heads

10 Non-Development Expenditure - Major Heads

11 Development and Non-Development Expenditure - Plan and Non-Plan Components

12 Development and Non-Development Expenditure-Revenue and Capital Components

13 Plan and Non-Plan Expenditure - Revenue and Capital Components

14 Non-Plan Non-Development Expenditure of States

15 Composition of Social Sector Expenditure

16 Decomposition of Gross Fiscal Deficit

17 Financing of Gross Fiscal Deficit

18 Financing of Gross Fiscal Deficit - As per cent to Total  

19 Composition of Outstanding Liabilities of State Governments (As at end-March)

20 Composition of Outstanding Liabilities of State Governments – As proportion to Total  (As at end-March)

21 State Government Market Borrowings

LIST OF STATEMENTS

1 Major Fiscal Indicators

2 Revenue Deficit/Surplus

3 Conventional Deficit/Surplus

4 Gross Fiscal Deficit/Surplus

5 Decomposition of Gross Fiscal Deficit

6 Financing of Gross Fiscal Deficit - 2010-11 (Accounts)

7 Financing of Gross Fiscal Deficit - As per cent to Total - 2010-11 (Accounts)

8 Financing of Gross Fiscal Deficit - 2011-12 (RE)

9 Financing of Gross Fiscal Deficit - As per cent to Total - 2011-12 (RE)

10 Financing of Gross Fiscal Deficit - 2012-13 (BE)

11 Financing of Gross Fiscal Deficit - As per cent to Total - 2012-13 (BE)

12 Development Expenditure

13 Non-Development Expenditure

14 Plan Expenditure

15 Non-Plan Expenditure

16 Non-Plan Non-Development Expenditure

17 Interest Payments

18 Tax Revenue

19 Own Tax Revenue  

20 Non-Tax Revenue

21 Own Non-Tax Revenue

22 Share in Central Taxes

23 Grants from the Centre

24 Loans from the Centre

25 Gross and Net Devolution and Transfer of Resources from the Centre

26 Composition of Outstanding Liabilities (As at end-March 2011-13)

27 Total Outstanding Liabilities of State Governments (As at end-March)

28 Total Outstanding Liabilities of State Governments As percentage of GSDP (As at end-March)

29 Markets Borrowings of State Governments

30 Plan Outlay of State Governments

31 Capital Receipts and Capital Expenditure

32 State Government Market Loans

33 Outstanding Market Loans of State Governments (As at end-March 2012)

34 Maturity Profile of Outstanding State Government Securities (Outstanding as on March 31, 2012)

35 Maturity Profile of Outstanding State Government Securities - As Percentage to total (Outstanding as on March 31, 2012)  

36 Select Committed Expenditure of State Governments - As Ratio to States' Own Revenue

37 Select Committed Expenditure of State Governments - As Ratio to Revenue Expenditure

38 Availment of WMA and Overdraft from the Reserve Bank  

39 Ways and Means Advances from the Centre

40 Investment Outstanding in 14-day Intermediate Treasury Bills (As at end-March)

41 Expenditure on Education - As Ratio to Aggregate Expenditure  

42 Expenditure on Medical and Public Health and Family Welfare - As Ratio to Aggregate Expenditure

43 Outstanding Guarantees of State Governments (As at end-March)

44 Expenditure on Wages and Salaries  

45 Expenditure on Operations and Maintenance  

46 Social Sector Expenditure ..

47 Social Sector Expenditure to Total Expenditure

APPENDICES

I. Revenue Receipts of States and Union Territories with Legislature

II. Revenue Expenditure of States and Union Territories with Legislature

III. Capital Receipts of States and Union Territories with Legislature

IV. Capital Expenditure of States and Union Territories with Legislature

NOTE TO APPENDICES