In a recent development, Maharashtra has emerged as the front-runner in the Fiscal Health Report, showcasing commendable financial stability. Surprisingly, Chhattisgarh, a state often associated with economic challenges, secured an unexpected second position in the rankings.
The Fiscal Health Report’s assessment is based on four crucial fiscal parameters:
Fiscal Deficit: This indicator evaluates the gap between a state’s total expenditures and its total revenue. A lower fiscal deficit indicates better financial management.
State Debt Levels: The extent of a state’s indebtedness relative to its economic output, as measured by the Gross State Domestic Product (GSDP), gauges its ability to manage financial obligations.
Interest Payment to Revenue Receipts: This parameter underscores the ratio of interest payments on debts to the overall revenue earned by the state, revealing its debt servicing capability.
Despite its reputation as one of the economically challenged states in the nation, Chhattisgarh’s second-place ranking in the Fiscal Health Report is raising eyebrows. The assessment sheds light on its relatively stable fiscal condition, defying conventional perceptions.
The report aligns with a cautionary statement from the Reserve Bank of India (RBI) in June 2022, which emphasized the concerning fiscal situation of these states. The RBI’s warning reinforces the need for prompt measures to address the economic vulnerabilities that existed even before the pandemic struck.
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