States`finances improve in FY23: RBI report
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The Reserve Bank of India (RBI) in its report on state budgets, which is done annually, has said that states' finances improved in FY23, and there is a need to look at asset monetisation to help garner non-tax revenues. It stated road, transport and power sectors hold considerable potential where the states can undertake asset sales.
It said ‘States need to scale up their initiatives for asset monetisation in order to increase non-tax revenue. The monetisation of assets unlocks their value, eliminates their holding cost and enables scarce public funds to be deployed into new projects, thus fast-tracking new infrastructure creation.’ It also said mobilising revenues by undertaking a comprehensive review of unutilised land assets and converting them into revenue-generating industrial estates or doing an outright sale.
Further, it said that in the case of non-operational public sector undertakings (PSUs), states may expedite their liquidation to curb losses. States can also look at shoring up the non-tax revenues through revising user charges on electricity, water and other public services, royalties and premiums from mining, and better financial management of their PSUs.
It said States' fiscal deficit improved for the second consecutive year in FY23, with the gross fiscal deficit getting contained at 2.8 per cent, adding that in FY24, it is set to come at 3.1 per cent of GDP
