MUMBAI : With states staring at huge revenue deficits in the wake of significant contraction of gross tax collections due to the disruption caused by the COVID-19 pandemic, the overall capex budgeted by these governments is likely to witness a steep cut, thus impacting the construction industry, says Icra.
According to the rating agency, the overall capex budgeted by states for FY2021, which was around ₹5.7 lakh crore, is now likely to witness steep cut, as the headroom available to them for incurring capital expenditure has reduced substantially.
With the country being under a nationwide lockdown for almost over 60 days, economic activities have been severely impacted, and so have the state revenues, Icra said.