Led by a massive spike in revenue deficit of 2.8% of GDP, the aggregate fiscal deficit of the states will rise to 4.5% of the GDP in 2020-21 at ₹8.5 trillion as against the earlier forecast of 3% of GDP, the report said MUMBAI : Led by a massive spike in revenue deficit of 2.8% of GDP, the aggregate fiscal deficit of the states will rise to 4.5% of the GDP in 2020-21 at ₹8.5 lakh crore as against the earlier forecast of 3% of GDP, says a report.
As the nine-week long national lockdown to contain the spread of the coronavirus pandemic crippled the economy, the Centre has allowed the states to borrow 200 bps more than the legally mandated 3% deficit while the Centre itself has upped its borrowing targets by ₹4.2 lakh crore.