Both SGST revenues and own revenues of states are under stress even as they face increasing demands on spending State governments across the country have been at the frontlines of the nation-wide efforts to contain the covid-19 pandemic.
But they are running out of resources to sustain the fight, and to fund relief efforts. The ongoing lockdown has crimped revenue sources for state governments even as they continue to spend on health and relief efforts, precipitating a fiscal crisis.
The states have limited tools to deal with the fiscal crisis and can’t borrow as freely as the centre. Further, most states have little room left to increase spending given that the Fiscal Responsibility and Budget Management (FRBM) Act bars them from