States do Centre a good turn

A sharp reduction in states' deficit augurs well for the Centre's fiscal planning

A K Bhattacharya

Illustration: Binay Sinha

Until about 10 years ago, the Centre’s Budget size would be more than the combined expenditure of all the states. That changed in 2012-13. The states’ Budget size in 2012-13 rose to Rs 14.55 trillion, which for the first time was a little higher than that of the Centre’s at Rs 14.1 trillion.
Since then, the states’ share in total government expenditure in the country began rising steadily, and by 2019-20 it was as much as 55 per cent. The Covid pandemic led to a sharp rise in the Centre’s Budget size and changed that equation, but only for a year. While in 2020-21, the states’ expenditure was estimated at Rs 34 trillion, a little lower than that of the Centre at Rs 35 trillion, the following year saw the states regain their lead. Their share in total government expenditure inched up to 51 per cent, and in 2022-23 it is set to go up further to 53-55 per cent.
The purpose of bringing up the point on how the sta
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jan 24 2023 | 10:37 PM IST

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