RBI State Finance data suggests Telangana Macro Economy is healthy

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RBI State Finance data suggests Telangana Macro Economy is healthy.State Finances, a study of budgets- 2020-2021 by RBI suggests that Telangana Macro economy is healthy.

Fig 1: GFD
The Gross Fiscal deficit of Telangana is below the FRL threshold as given by Union Govt.(The Union Govt enhanced it 5% post covid and Telangana expected to be below the permissible limits).

Fig:2 Primary Deficit

The Primary Deficit 2019-20 RE versus 2007-8 of Telangana is far below the all states average.

Fig:3
The deficit indicators of Telangana since 2017 is within the permissible limits.

Fig-4 State Revenue recipients:

The picture suggests that States’ revenue started declining steadily from 2018-19 to 2019-20 (April – June).In Covid period the decline is very high.

Conclusion:
The state of macro economy of states with respect to revenue receipts were declining even before Covid in 2019-20 itself.The states were finding difficult to increase there own revenue due to GST.

It’s evident that its not Covid slow down but a structural slow down.Inspite of all these structural setbacks and Covid hit, Telangana Marco Economy is healthy.

Telangana Macro Economy

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