Led by a massive spike in revenue deficit of 2.8 per cent of GDP, the aggregate fiscal deficit of the states will rise to 4.5 per cent of the GDP in 2020-21 at Rs 8.5 lakh crore as against the earlier forecast of 3 per cent of GDP, says a report.
Accordingly, the agency has revised upwards its estimate of gross market borrowings of the states to Rs 8.25 lakh crore in FY21 from its earlier estimate of Rs 6.09 lakh crore, as the states are expected to resort to higher market borrowings to fund fiscal deficit.
