Foreword

List of Abbreviations

Chapter I: Overview

1.

Introduction

2.

Preview

Chapter II: Issues and Perspectives

1.

Introduction

2.

Fiscal Consolidation

3.

Fiscal Transparency

4.

Classification of Expenditure

5.

Central Transfers to States

6.

External borrowings

7.

Losses of State Power Utilities

8.

Public Private Partnership (PPP) at the State Level

9.

Conclusion

Chapter III: Policy Initiatives

1.

Introduction

2.

State Governments

3.

Government of India

4.

Reserve Bank of India

5.

Conclusion

Chapter IV: Consolidated Fiscal Position of State Governments

1.

Introduction

2.

Accounts: 2009-10

3.

Revised Estimates:2010-11

4.

Budget Estimates: 2011-12

5.

Assessment

6.

Conclusion

Chapter V: State-Wise Analysis of Fiscal Performance

1.

Introduction

2.

Deficit Indicators of the State Governments

3.

Revenue Receipt of the State Governments

4.

Expenditure Pattern of the State Governments

5.

Budgetary Stance of States for 2011-12 vis-a-vis the ThFC Benchmark

6.

Conclusion

Chapter VI: 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 VII: Role of the Reserve Bank in State Finances

1.

Introduction

2.

The Reserve Bank and State Finances: Legal and Institutional Underpinnings

3.

Evolving Role of the Reserve Bank in the Pre-reform period (1935-1990)

4.

Role of the Reserve Bank in the Post-Reform Period since 1990

5.

Impact of Reserve Bank’s role on State Finances: Overall Assessment

6.

Concluding Observations and the Way Forward

ANNEX 1

Amendments to the Fiscal Responsibility and Budget Management Acts -Deficit and Debt Targets

Explanatory Note on Data Sources and Methodology

LIST OF BOXES

II.1.

Recommendations of the High Level Expert Committee on Efficient Management of Public Expenditure

II.2.

Report of the Committee on Restructuring of Centrally Sponsored Schemes

II.3.

Report of the High Level Panel on Financial Position of Distribution Utilities – A Brief

VI.1.

Review of National Small Savings Fund (NSSF)

VII.1.

Approaches to Sub-national Debt Management: Cross-country Experiences

VII.2.

Recourse to market borrowings by the State Government and Interest burden

LIST OF TABLES

III.1:

State-wise Measures to Contain Price rise in Administered Petroleum Products

III.2:

Institutional Reforms by State Governments.

IV.1:

Major Deficit Indicators of State Government.

IV.2:

Variation in Major Items - 2009-10 (Accounts) over 2009-10 (RE)

IV.3:

Variation in Major Items - 2010-11 (RE) over 2010-11 (BE)

IV.4:

Variation in Major Items - 2011-12 (BE) over 2010-11 (RE)

IV.5:

Aggregate Receipts of State Governments

IV.6:

Cost Recovery of Select Services

IV.7:

Expenditure Pattern of State Governments

IV.8:

Development Expenditure vis-à-vis Total Expenditure

IV.9:

Trends in Aggregate Social Sector Expenditure of State Governments.

IV.10:

Expenditure on Social Services (Revenue and Capital Accounts) – Composition

IV.11:

State-wise Correction of RD and GFD - 2011-12 (BE) over 2010-11 (RE)

IV.12:

Decomposition and Financing Pattern of Gross Fiscal Deficit - 2009-10 (Accounts) to 2011-12 (BE)

IV.13:

Budgetary Data Variation- State Budgets and Union Budget

IV.14:

Performance of the States vis-à-vis Thirteenth Finance Commission Assessment

V.1:

Fiscal Imbalances in Non-Special and Special Category States

V.2:

Deficit Indicators of State Governments.

V.3:

Revenue Receipts of the State Governments

V.4:

Revenue Expenditure of the State Governments

V.5:

Details of Committed Expenditure

V.6:

Development Expenditure: Select Indicators ;

V.7:

Deficit Indicators in 2011-12: Comparison with ThFC Targets

VI.1:

Outstanding Liabilities of State Governments

VI.2:

Composition of Outstanding Liabilities of State Governments

VI.3:

State-wise Debt-GSDP Position

VI.4:

Interest Rate Profile of the Outstanding Stock of State Government Securities

VI.5:

Market Borrowings of State Governments

VI.6:

Maturity Profile of Outstanding State Government Securities

VI.7:

Average Interest Rate on Outstanding Liabilities of State Governments

VII.1:

Minimum Balances and Limits of WMAs

VII.2:

Salient Features of WMA Scheme of the State Governments

LIST OF CHARTS

IV.1:

Trend in Interest Receipt.

IV.2:

Composition of Committed Expenditure

V.1:

Revenue Receipts of States

V.2:

Current Transfers from the Centre

V.3:

Composition of Revenue Receipts

V.4:

Value Added Tax in Non-special Category States

V.5:

Value Added Tax in Special Category States

V.6:

Pre-emption of Revenue Receipts by Committed Expenditure and Interest Payments

V.7:

Composition of Interest Payments in Non-special Category States - 2010-11 (RE)

VI.1:

Deficit, Debt and Interest Burden

VI.2:

Utilisation of WMA and Overdraft by States (Average of daily outstanding)

VI.3:

Investment in 14-day Intermediate and Auction Treasury Bills by the State Governments (Average of Friday outstanding)

VII.1:

Outstanding WMAs and Invesment in Treasury Bills (as at end-March)

VII.2:

GFD and its financing through market borrowings

VII.3:

Interest rates on market borrowings and NSSF loans

VII.4:

Outstanding market loans, interest payments and surplus/deficit on the revenue account

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 - 2009-10 (Accounts)

7.

Financing of Gross Fiscal Deficit - As per cent to Total - 2009-10 (Accounts)

8.

Financing of Gross Fiscal Deficit - 2010-11 (RE)

9.

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

10.

Financing of Gross Fiscal Deficit - 2011-12 (BE)

11.

Financing of Gross Fiscal Deficit - As per cent to Total - 2011-12 (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.

Devolution and Transfer of Resources from the Centre

26.

Composition of Outstanding Liabilities (As at end-March 2010-12)

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 2011)

34.

Maturity Profile of Outstanding State Government Securities (Outstanding as on March 31, 2011)

35.

Maturity Profile of Outstanding State Government Securities - As Percentage to total (Outstanding as on March 31, 2011)

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