States' FY27 gross borrow seen at INR 14.5 tln, up 13%, says IDFC FIRST Bank
This story was originally published at 21:55 IST on 21 April 2026
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MUMBAI – States' gross borrowing is seen at INR 14.50 trillion in 2026-27 (Apr-Mar), up 13% on year, compared with actual issuances totalling INR 12.8 trillion in FY26, economists from IDFC FIRST Bank said in a note Tuesday. The estimated figure is based on a fiscal deficit at 3.6% of gross state domestic product, it said.
The economists estimate that states' fiscal deficit in FY27 will remain largely unchanged from the previous year at 3.6% of GSDP. According to the report, states' revenue receipt targets appear optimistic compared with prior trends in collection. In addition, value-added tax on fuels is likely to fall following excise duty cuts by the central government, along with pressure from the West Asia conflict. However, a rise in retail fuel prices could offset part of that decline, the note said.
"The fiscal consolidation target is ambitious, given downside risk to revenue receipts--both tax and non-tax collection," the note said. "Even after accounting for expenditure moderation FY27 fiscal deficit is likely to remain flat at best at 3.6% of GSDP (state GDP)." End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Janwee Prajapati
Edited by Akul Nishant Akhoury
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