Economy. Fiscal policy has reached limits. Fiscal spending. Private investment. Private consumption. Thematic April 2018

Private investment Fiscal spending Private consumption Thematic April 218 India Strategy Get on track please! Economy Fiscal policy has reached limits Nikhil Gupta - Research analyst (Nikhil.Gupta@MotilalOswal.com); +91 22 3982 545 Rahul Agrawal - Research analyst (Rahul.Agrawal@motilaloswal.com); +91 22 3982 5445 Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/institutional-equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Contents: State Budgets - Fiscal policy has reached limits Fiscal policy has reached limits... 3 PART I. Five key macro implications for the financial markets... 13 PART II. Key highlights from states finances... 28 PART III. What do the combined budgets tell us?... 45 Appendix... 51 All states... 51 Andhra Pradesh... 53 Bihar... 55 Chhattisgarh... 57 Gujarat... 59 Haryana... 61 Himachal Pradesh... 63 Jammu & Kashmir... 65 Jharkhand... 67 Karnataka... 69 Kerala... 71 Madhya Pradesh... 73 Maharashtra... 75 Odisha... 77 Punjab... 79 Rajasthan... 81 Tamil Nadu... 83 Telangana... 85 Uttarakhand... 87 Uttar Pradesh... 89 West Bengal... 91 April 218 2

Fiscal policy has reached limits Combined analysis of center and states budgets suggests so Thematic State Budgets Economy Following our practice adopted last year, we analyze the 218-19 budgets of 2 major states of the Indian economy, which account for ~93% of national GDP and ~95% of total spending by all states. Though every minute detail of the Union Budget is deciphered by the markets, state budgets don't receive their due share of attention. Together, state budgets are more than 16% of the Union Budget and the market borrowings by states will be similar to those of the center in FY19 for the first time in the history of liberalized India. To understand fiscal policy of the economy, thus, a combined analysis of the states and the center is required. Our key findings are: Notwithstanding general elections in 219, real spending of the general government (center + states) is budgeted to slow down to 6.6% YoY in FY19 versus an average growth of 9.1% in the previous three years. Historical analysis of the spending patterns during election years since late 199s suggests their linkages with election results. GST implementation has brought immense optimism to the general government, which has budgeted record-high taxes of 18.7% of GDP for FY19, better than 17.6% in FY8. Spending, however, is budgeted to grow moderately, due to which the combined fiscal deficit is budgeted at 5.7% for FY19. After a decline in capital spending in, fiscal capex is budgeted to grow 11.6% YoY in FY19, similar to 11.3% growth budgeted for core revenue spending. If so, the contribution of government spending (consumption + investment) to real GDP growth is set to fall further in FY19. Consequently, we peg our real GDP growth forecasts at 6.9% for FY19, better than 6.7% in FY18, but lower than the consensus of 7.3-7.4%. Economy Fiscal policy has reached limits Mr Nikhil Gupta Please click here for Video Link Why should one read this report? Apart from the Reserve Bank of India (RBI), we are not aware of any other private or official organization providing comprehensive research on pooled budget for states. The RBI s publication is also released with a lag of 12-14 months (the new publication on State Finances will cover the state budgets for 217-18, while states have presented their 218-19 budgets last month). Admittedly, while the RBI s publication covers all 29 states, our research covers 2 large states. There are at least six reasons why market participants would be interested in the combined analysis of the center and state finances: Along with general elections, as many as ten states accounting for ~4% of national GDP are also scheduled for elections in 219. FY19 budgets, thus, hold special importance, and a combined analysis of the center and states is recommended. The relevance of fiscal spending for real GDP growth has increased in the past few years. Government spending (consumption + investments) contributed as much as 22.5% (or 1.6 percentage points (pp)) to real GDP growth in, up from.2-.3pp in. An analysis of the finances of the general government helps us make better informed predictions regarding real GDP growth. April 218 3

With the implementation of goods & services tax (GST) in 217, any appraisal of the performance of GST requires the analysis of the combined budgets With the implementation of goods & services tax (GST) in 217, any appraisal of the performance of GST requires the analysis of the combined budgets. States budgets account for more than 16% of the Union Budget, and the former s spending on India s rural sector (agriculture activities + rural development + irrigation) is more than 3% that of the latter s. Thus, it is important to understand the spending pattern of states, along with the center. With the implementation of the 7 th central pay commission in, states have also implemented pay revisions. The bill on salary & wages by the states is at least 3x that of the center, and thus, it is pertinent to understand the economic and fiscal impacts of pay revisions by states. For the first time in the history of the liberalized India, gross/net market borrowings of the states is budgeted to be similar to that of the center at INR5.5t/INR4.2t or ~3%/2.3% of GDP in FY19. This is because states are planning to finance as much as ~91% of their deficit via market borrowings as against ~66% by the center. Coverage of our report We have covered 218-19 budgets of 2 states: Andhra Pradesh (AP), Bihar (BH), Chhattisgarh (CT), Gujarat (GJ), Haryana (HR), Himachal Pradesh (HP), Jammu & Kashmir (JK), Jharkhand (JH), Karnataka (KA), Kerala (KL), Madhya Pradesh (MP), Maharashtra (MH), Odisha (OR), Punjab (PB), Rajasthan (RJ), Tamil Nadu (TN), Telangana (TG), Uttar Pradesh (UP), Uttarakhand (UK), and West Bengal (WB). We have covered all non-special category states except Goa (GA). Of the 11 special category states (SCS), three Himachal Pradesh (HP), Jammu & Kashmir (JK) and Uttarakhand (UK) are covered. Our coverage of 2 states account for ~95% of total spending by all states, ~94% of total receipts by all states and ~97% of total state development loans (SDLs) issued. We have used these ratios to estimate the finances for all states. Framework of our report The report is divided into four parts. Part-I discusses five themes relevant for the financial markets after careful study of the combined budgets of the center and states. Part-II provides detailed analysis of the pooled budgets for all states. In part- III, we examine the combined budgets of the center and the states. Part-IV is an Appendix, which gives detailed finances of all states and 2 individual states covered in our report. April 218 4

Thematic States Budget PART I. FIVE KEY MACRO IMPLICATIONS FOR THE FINANCIAL MARKETS Theme #1: What does the analysis of combined budgets indicate about real GDP growth? Although accounting for ~14% of GDP, government spending (consumption + investment) contributed as much as 22.5% and 16.4% to real GDP growth in and FY18, respectively. With real core revenue spending budgeted to grow at the slowest pace in 4 years, the contribution of fiscal spending to real GDP growth is set to fall further in FY19. We project real GDP to grow 6.9% in FY19, better than 6.7% in FY18, but slower than the market consensus of 7.3% and RBI s forecast of 7.4%. Net market borrowings by the government will absorb 21.8% of non-government financial savings in FY19, lower than 23.2% in FY18 The general election results have been in line with movements in fiscal spending. Real rural spending by the general government is budgeted to grow only 6.6% in FY19, versus an average growth of 16.3% during the previous four years Although pay awards have been revised, the positive impact on macro economy, and the corresponding adverse impact on states finances, has been muted Theme #2: Higher fiscal borrowings unlikely to crowd out private sector Gross market borrowings by all states are budgeted to increase 28.5% to INR5.5t in FY19, similar to the center s borrowings. It means that gross market borrowings by the general government (center + states) will touch INR11t this year. With higher repayments, however, net market borrowings are budgeted at 4.5% of GDP (or INR8.4t) in FY19, marking the lowest level in 11 years. This, we believe, will not tighten the market liquidity because net borrowings will absorb 21.8% of nongovernment financial savings in the economy, lower than 23.2% in FY18. Theme #3: How does fiscal spending behave during election years? An analysis of trends in core revenue spending during election years since the late 199s confirms that while it grew faster in FY99 and FY9, it grew much slower in FY4 and. The incumbents restored power in FY99 and FY9 when spending grew faster, while lost elections when spending grew slowly. The general election results, thus, have been in line with movements in fiscal spending. Theme #4: How much fiscal support is budgeted for the rural sector? Notwithstanding the recent concerns regarding stress in the rural sector, real rural spending by the general government is budgeted to grow only 6.6% in FY19, versus an average growth of 16.3% during the previous four years. It must, however, be noted that the share of rural spending in total spending has increased sharply for both the center and states during the recent years to the highest level in almost two decades. Theme #5: Where is the expected boost from 7th pay revisions? Sixteen out of 18 states except Punjab and West Bengal due for pay revisions have done so between and FY19. As per states budgets, the growth in aggregate salary & wage bill for all states combined was 14.4% in and is budgeted at 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1. Although pay awards have been revised, the positive impact on macro economy, and the corresponding adverse impact on states finances, has been muted since the states have amortized the pay commission awards by 2-3 years in many cases. April 218 5

Notwithstanding the election year, states total spending is budgeted to grow 11.4% in FY19, marking the slowest pace in 13 years Governments are highly optimistic on the receipts front, as both the center and the states have budgeted record high taxto-gdp ratio in FY19 PART II. KEY HIGHLIGHTS FROM STATES FINANCES On an aggregate basis, states have budgeted a fiscal deficit of 2.5% of GDP in FY19, the lowest in five years. Aggregate debt of states crossed 25% of GDP in, from the recent low of 21.7% in and is budgeted to rise marginally to 25.3% of GDP in FY19. States have consistently increased their reliance on market borrowings to finance fiscal deficit in the past few years. On aggregate basis, states gross borrowings are budgeted to rise to INR5.5t or 2.9% of GDP, while net borrowings are expected to rise to INR4.2t or 2.3% of GDP in FY19. Following a record high growth of 22.3% in, total receipts of all states are budgeted to grow 13.5% in FY19. States have not provided GST data on uniform basis, and thus, it is difficult to estimate the budgeted growth or monthly run-rate expected in GST collection in FY19. As many as 1 states, accounting for ~4% of national GDP, will have elections in 219. Notwithstanding the election year, states total spending is budgeted to grow 11.4% in FY19, marking the slowest pace in 13 years. PART III. WHAT DO THE COMBINED BUDGETS TELL US? Aggregate fiscal deficit of the general government in India is budgeted at 5.7% of GDP in FY19, lower than the revised estimate (RE) of 6.3% of GDP in FY18 (higher than of 5.8%). Notably, fiscal deficit of the general government was above 6% of GDP for more than 9% of the time post liberalization. Governments are highly optimistic on the receipts front, as both the center and the states have budgeted record high tax-to-gdp ratio in FY19. India s tax-to- GDP ratio is budgeted to rise to an all-time high of 18.7% of GDP this year, primarily supported by higher indirect taxes (~63% of all taxes), which are budgeted to grow 17% in FY19. It confirms that the governments expect GST to boost tax receipts significantly. Total spending of the general government is budgeted to grow 11% in FY19, similar to that in. As % of GDP, however, total spending is budgeted to slow from 27.9% to 27.7% in FY19. April 218 6

DISCUSSION POINTS A Five key macro implications for the financial markets B Key highlights from pooled state budgets C What does the general government budget tell us? SECTION I: FIVE THEMES FOR THE FINANCIAL MARKETS Theme#3 Theme#1 Theme#2 Higher fiscal borrowings unlikely to crowd out private sector 2 How does fiscal spending behave during election years? 3 4 How much fiscal support is budgeted for the rural sector? Theme#4 Theme#5 What does the analysis of combined budgets indicate about real GDP growth? 1 FIVE THEMES FOR THE FINANCIAL MARKETS 5 Where is the expected boost from 7th pay revisions?

FIVE THEMES FOR THE FINANCIAL MARKETS What does the analysis of combined budgets indicate about real GDP growth? Theme#1 Contribution of fiscal spending to GDP growth will fall in FY19, as real spending growth at 4-yr slowest pace Higher fiscal borrowings unlikely to crowd out private sector Theme#2 Total borrowings by the government to absorb smaller share of domestic savings in FY19 How does fiscal spending behave during election years? Theme#3 During the past four elections, real fiscal spending growth has shown positive links with election results How much fiscal support is budgeted for the rural sector? Theme#4 Notwithstanding election year, real rural spending to grow at less than half the average growth in the past four years Where is the expected boost from 7th pay revisions? Theme#5??? 7 th pay commission awards to have muted economic and fiscal impact due to amortized payments

ECONOMY STORY IN CHARTS Government Private Net exports Discrepancies GDP.1.2.1.2 2..2.2.1.8 4.5 6.1 5.2 6.8 6.5 5. 4.7 2.4.2.3 1. 1. 1.6 1.1.9 (.8) (1.4) (.8) (.2) Contribution of fiscal spending to real GDP growth is set to fall further in FY19 FY18E FY19F as real core spending of general government budgeted to grow slowly (% YoY) Real core spending of GG due to 14-yr slowest growth in states core spending 25 (% YoY) Core spending 2 15 11.2 8.7 5.2 7.2 6.6 1.8 1.6 1 11.4 5 FY91 FY95 FY99 FY3 FY7 FY11 Fiscal deficit (INRb) % of GDP 4.5 4.1 4. 4. 3.9 4.2 3.2 2.8 2.7 2.6 2.3 2.5 2.6 2.8 3.3 2.4 2.4 2.9 1.8 2.1 1.7 1.9 2. 2.2 2.6 3.1 3.5 2.8 2.5 188 189 29 24 273 39 368 435 738 91 879 943 997 1,26 1,78 91 794 824 1,349 1,896 1,627 1,69 1,956 2,482 3,283 4,257 5,389 4,656 4,635 States have budgeted aggregate fiscal deficit to ease to 2.5% of GDP in FY19 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 However, combined net borrowings are budgeted to fall (% of GDP) despite states financing ~91% of deficit via market borrowings 11 (% of FD) States Centre 95 8 5.2 5.6 6.1 6.6 3.7 4.2 3.9 4.7 7. 9. 7. 7.6 7.4 6.8 6.7 6.4 6.4 6.1 5.9 65 5 FY1 FY4 FY7 FY1 FY9 FY11

(% of GDP) Center States 5.3 5.1 5.1 5.2 5. 4.8 5. 4.8 4.9 5.2 5.2 5.4 5.4 5.6 5.7 5.9 5.7 5.7 5.6 5.9 6.4 6.6 6.3 6.3 6.2 6. 6.4 6.6 1. 9.6 8.5 8.8 9.1 9.1 8.9 8. 8.5 8.7 7.9 8.5 9. 9.4 9.9 11. 11.9 1.8 9.6 1.2 1.2 1.4 1.1 1. 1.6 11.2 11.6 12.1 Tax-to-GDP ratio budgeted at alltime high based on high optimism on GST regime FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 as indirect taxes are expected to grow faster than direct taxes 4 (% YoY) Direct taxes Indirect taxes 3 2 1 leading to higher share of indirect taxes in total taxes in more than a decade 1 Direct taxes Indirect taxes 8 6 4 FY9 FY1 FY11 FY12 2 24.8 31.9 42.1 38.8 37.2 FY99 FY3 FY7 FY11 Total spending 29.5 28.2 27.9 28.1 26.6 26.1 27. 28. 27.9 28.3 28.5 29.4 3.5 28.4 26. 25.8 26.4 28.3 28.4 27.5 27.5 26.9 26.5 26.2 27.1 27.6 27.9 27.7 Total spending, however, is likely to moderate (as % of GDP) in FY19 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 25 2 15 1 5 (% YoY) NDA retained power in NDA lost in 24 Real core revenue spending of GG UPA retained power in 29 UPA lost in 214 Will history repeat in 219? FY97 FY99 FY1 FY3 FY5 FY7 FY9 FY11 Notwithstanding elections in 219, real core revenue spending of general government to grow at 4-yr slowest pace in FY19

3 2 1-1 (% YoY) Combined real spending on rural sector Rural spending budgeted to grow 6.6% 21.5 in FY19, after average 5.2 4.1 FY99 FY1 FY3 FY5 FY7 FY9 FY11 (2.5) 6.6 Real rural spending by general government also to grow slowly in FY19 however, rural spending has grown faster during the past five years 25 Revenue Capital Total (% CAGR) 2.8 2 18.8 15 due to which its share in total spending has increased to the highest level Rural spending by GG 12.2 11.9 11.7 1.8 1.3 1.4 9.6 1.4 12.2 12.3 12.6 13.9 12.8 12.8 11.8 11.4 1.6 12.5 12.2 12.8 14.6 14.4 1 5 6.1 1.2 FY-4 FY5-9 FY1-14 -19BE FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 Aggregare salary bill of 2 states 26.4 29.8 17. 15.5 11.6 1.1 1.6 8.7 11. 14.4 16.6 7 th pay commission awards by states to have muted economic and fiscal impact vis-à-vis 6 th pay commission FY9 FY1 FY11 FY12 Where does the center spend? Where do states spend?, 34. Defense, 1.9, 36.6 Education etc, 15.5 Transport, 5.5 Housing, 1.8 Rural sector, 7.1 Pensions, 6.9 Interest payments, 23.6 Subsidies, 12.1 Pension, 9.2 Transport, 4.7 Interest payments, 9.8 Energy, 5.3 Rural sector, 17.2

GENERAL GOVERNMENT FINANCES INR b % YoY Total receipts 31,514 36,17 36,21 41,249 13.3 14.9 13.9 Revenue receipts 3,692 34,85 34,485 39,75 13.3 12.4 15.3 Total taxes 26,282 3,139 3,26 35,8 14.1 14.9 16.1 Direct 9,484 11,178 11,373 13,46 12. 19.9 14.7 Center (gross) 8,344 9,8 1,3 11,5 12.6 2.2 14.7 States' own 1,141 1,378 1,343 1,546 7.7 17.8 15.1 Indirect 16,798 18,961 18,833 22,34 15.4 12.1 17. Center (gross) 8,815 9,316 9,431 11,212 23.3 7. 18.9 States' own 7,984 9,645 9,41 1,822 7.7 17.8 15.1 Non-tax receipts 4,49 4,712 4,279 4,67 8.8 (3.) 9.1 Non-debt capital receipts 822 1,32 1,725 1,499 13.9 19.8 (13.1) Total spending 42,71 45,858 46,683 51,834 13. 11. 11. Revenue spending 34,89 37,711 38,963 43,222 12.1 14.3 1.9 Center# 13,115 12,84 13,959 15,426 9.9 6.4 1.5 States 2,974 24,97 25,4 27,797 13.5 19.2 11.2 S&W 8,33 9,43 9,37 1,591 13.9 12.8 13. Center 2,744 2,916 3,8 3,177 2.3 9.6 5.6 States 5,559 6,514 6,361 7,414 11. 14.4 16.6 Interest payments 7,446 8,136 8,241 9,15 13.4 1.7 9.4 Center 4,927 5,231 5,38 5,758 11.5 7.7 8.5 States 2,519 2,95 2,933 3,257 17.1 16.4 11.1 Pension 3,53 4,18 4,241 4,757 18.2 2.1 12.2 Center 1,314 1,312 1,474 1,685 35.8 12.2 14.3 States 2,216 2,796 2,767 3,72 9.7 24.9 11. Subsidies* 2,348 2,723 2,66 2,949. 13.3 1.9 Capital spending 7,982 8,147 7,72 8,612 16.8 (3.3) 11.6 Center 2,846 3,98 2,734 3,4 12.5 (3.9) 9.9 States 5,136 5,49 4,986 5,68 19.4 (2.9) 12.5 Agriculture, irrigation and rural development~ 1,267 1,575 1,446 1,766 17.3 14.2 22.1 Transport 1,817 2,1 1,965 2,22 23. 8.1 12. Center@ 864 1,92 99 1,125 34.9 5.2 23.8 States 953 1,8 1,56 1,77 2. 1.8 2. Defense* 864 865 865 94 8..1 8.7 Loans and advances 1,522 721 615 591 28.2 (59.6) (3.9) Fiscal deficit 1,557 9,688 1,473 1,586 % of GDP 6.9 5.8 6.3 5.7 Revenue deficit 3,397 2,86 4,478 3,472 % of GDP 2.2 1.7 2.7 1.9 Primary deficit 3,111 1,552 2,232 1,57 % of GDP 2..9 1.3.8 GSDP (at current prices) 152,537 168,475 167,517 187,149 # adjusted for transfers to states * for Center only @ includes railways also ~ for states only Source: States/Union budget documents, MOSL April 218 12

PART I. Five key macro implications for the financial markets Theme #1 What does the analysis of combined budgets indicate about real GDP growth? Although accounting for ~14% of GDP, government spending (consumption + investment) contributed as much as 22.5% and 16.4% to real GDP growth in and FY18, respectively. With states budgeting 14-year slowest growth in core spending (total spending excluding interest payments), the contribution of fiscal spending to real GDP growth is expected to fall further in FY19. We project real GDP to grow 6.9% in FY19, better than in FY18, but slower than the market consensus of 7.3% and RBI s forecast of 7.4%. The share of private spending in GDP has fallen sharply from ~92% in to 85.5% in A quick background: Share/contribution of private and government spending to GDP growth The Central Statistics Office (CSO), the official agency of the Government of India (GoI), provides GDP statistics regularly in two ways expenditure approach and output approach. As a regular in-house practice, we re-classify GDP statistics with a new approach, wherein we separate fiscal investments from the other sectors (including households, private corporate and public corporate sectors) investments. This re-classification helps us separate private spending (consumption + investments) from the fiscal (including central and state governments) spending. Our estimates suggest that the share of private spending in GDP has fallen sharply from ~92% in to 85.5% in, before improving to 86.5% in FY18E (Exhibit 1-2). Nevertheless, fiscal spending maintained its growth in such a manner that its share in GDP was broadly unchanged at close to 14% over the past five years. Net exports, as the exhibits show, narrowed sharply post, and added to real GDP growth between and. Exhibit 1: Private spending accounted for ~92% of GDP and government spending for 14% of GDP in Exhibit 2: In FY18, while the share of private sector fell to 86.5%, it remained unchanged for the government FY18E Private spending*, 92. General government#, 14. Net exports, (6.4) Discrepancy,.5 Private spending*, 86.5 General government#, 14.1 Net exports, (2.3) Discrepancy, 1.7 # Center + States * All sectors including public corporations except general government Source: Central Statistics Office (CSO), Union/State budget documents, CEIC, MOSL April 218 13

While real private spending grew at a CAGR of 6.7% between and FY18, government spending grew much faster at 8.6%. Re-classification on GDP statistics also confirms that while real private spending grew at a CAGR of 6.7% between and FY18, government spending grew much faster at 8.6%. Real GDP growth, thus, grew at a CAGR of 7.3% during this period (Exhibit 3). In FY18, however, growth in private and government spending was broadly similar at ~7.5% (Exhibit 4). It is also notable that fiscal support to real GDP growth began rising from, when crude oil prices started collapsing. Notwithstanding the mega bonanza from a ~75% decline in crude oil prices, fiscal deficit of the general government (GG) as discussed in detail later in the report was unchanged at 6.6% of GDP between and. Exhibit 3: Government spending has grown faster than private spending since (CAGR %) Exhibit 4: however, their spending growth was similar at ~7.5% each in FY18E (% YoY) 8.6 15 Private spending Govt spending 7.3 6.7 12 9 6 3 GDP Private Government FY18E Source: CEIC, RBI, CSO, MOSL Real core spending of the general government (center + states) is budgeted to grow 6.6% in FY19, slowest in the past four years What is to be expected for FY19? Our analysis of the budgets of 2 states, which account for ~93% of national GDP and ~95% of total spending by all states in the country, confirm that states have budgeted a 14-year slow growth of 11.4% in core total core spending (total spending less interest payments, relevant for GDP) in FY19 (Exhibit 5). Combining this with the Union Budget and using GFCE deflator, our calculations suggest that real core spending of the general government (center + states) is budgeted to grow 6.6% in FY19, slowest in the past four years (Exhibit 6). Exhibit 5: States core spending* in FY19 is budgeted to grow at the slowest pace in 14 years 25 2 (% YoY) Core spending Exhibit 6: due to which real core spending of general government is likely to grow more slowly (% YoY) Real core spending of GG 15 1 5 11.4 FY91 FY95 FY99 FY3 FY7 FY11 * Total spending excluding interest payments 11.2 8.7 5.2 7.2 6.6 1.8 1.6 Source: Union/State budget documents, CEIC, RBI, CSO, MOSL April 218 14

Consequently, we believe that slower fiscal spending and moderation in private investments (primarily due to very high base in FY18E) would offset a large part of the positive contributions from private consumption and net exports (the incremental drag on real GDP growth will be lower than in FY18) in FY19 (Exhibit 7). We, thus, expect India s real GDP to grow 6.9% in FY19, better than 6.7% estimated for FY18 but slower than the market consensus of 7.3% and 7.4% forecasted by the Reserve Bank of India (RBI). Exhibit 7: Key contributors to real GDP growth (percentage points) Government Private Net exports Discrepancies GDP.8 4.5 4.7 2.4.2.1.1.2 2..1.2.2 6.1 5.2 6.8 5. 6.5.2.3 1. 1. 1.6 1.1.9 (.8) (1.4) (.8) (.2) FY18E FY19F Source: CSO, Union/State budget documents, CEIC, MOSL April 218 15

Theme #2 Higher fiscal borrowings unlikely to crowd out private sector Our estimates suggest that gross market borrowings by all states are budgeted to grow 28.5% to INR5.5t in FY19, similar to the center s borrowings. It means that gross market borrowings by the general government (center + states) will touch INR11t this year. With higher repayments, however, net market borrowings are budgeted at INR4.2t for states and INR8.4t for the general government. This would imply net borrowings worth 4.5% of GDP in FY19, marking the lowest level in 11 years. This, we believe, will not tighten market liquidity because net borrowings will absorb 21.8% of non-government financial savings in the economy, lower than 23.2% in FY18. Our estimates suggest that gross borrowings by all states would be about INR5.5t in FY19, 28.5% higher than in FY18 Gross borrowings could touch INR11t in FY19 According to RBI data, our sample of 2 states accounted for ~97% of market borrowings by all states in the past many years. Assuming a similar ratio, our estimates suggest that gross borrowings by all states would be about INR5.5t in FY19, 28.5% higher than in FY18 (Exhibit 8). According to the indicative calendar of market borrowings by state governments released by the RBI this month, states are planning to borrow INR1,156b-1,281b in 1QFY19. As per our estimates, this would be 21-23% of gross market borrowings budgeted by the state governments for the full year. A look at the past trends reveals that states tend to borrow ~16% of their gross borrowings in the first quarter (Exhibit 9). Exhibit 8: States estimated to borrow INR5.5t in FY19 (INRb) Gross market borrowings by states 5,45 4,243 Exhibit 9: of which ~22% is planned in the first quarter# 22.4 22.2 16.7 17.8 15.5 16.5 17. 15.7 15.4 14.3 FY9 FY1 FY11 FY12 FY1 FY11 FY12 FY18 FY19 * Assuming our sample of 2 states account for 97% of borrowings by all states in FY19, same as in previous years #Based on our estimate of full-year borrowings by all states Source: States budgets, RBI, CEIC, MoSL A look at the 2 states individually shows that Gujarat (GJ) and Maharashtra (MH) have budgeted for the least net (gross) market borrowings worth 1.6% (2.2%) and 1.7% (2.3%) of GSDP, respectively, while Jammu & Kashmir (JK), Rajasthan (RJ), Telangana (TG) and West Bengal (WB) have budgeted for net borrowings of above 3% of GSDP the highest for FY19 (Exhibit 1). April 218 16

Exhibit 1: Budgeted net/gross borrowings by states for FY19 (% of GSDP) Net Repayments.7.7 2.7 2.9. 2.5.6 1.6.5 1.4 2.8 2.5 1.1 3.2.5.5 2.1 2.1.7 2.6.6 2.3.6 1.7.2 1. 2.5 2.8.7 3.1.7 2.5.6 3.2.9.4 2.5 2.6 1.2 3..7 2.3 AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB All Source: State Budgets, RBI, CEIC, MoSL It is also important to note that while aggregate fiscal deficit of states is budgeted to fall from INR4.65t in to INR4.63t in, gross market borrowings have increased to INR5.5t. During the last five years, while the states have increased their reliance on market borrowings, the center has reduced it (Exhibit 11). In FY19, while the states have budgeted to finance 91% of their deficit by market borrowings, the center has budgeted only 66%. (Of course, NSSF has shifted from the states to the center, which played an important role here.) Exhibit 11: States have increased their reliance on market borrowings, while the center has reduced it (% of FD) 1 9 8 7 (% of FD) States Centre Exhibit 12: General government gross borrowings budgeted to be about INR11t in FY19 (INR b) 12, 9, 6, 3, Centre States 6 5 FY9 FY11 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 Source: Union/State Budgets, RBI, CEIC, MoSL Gross market borrowings of the general government are budgeted to fall from 6.1% of GDP in to 5.9% in, marking the lowest level in eleven years however, budgeted to fall to 11-year lowest level of 5.9% of GDP in FY19 Overall, the combined gross market borrowings of the center and states are budgeted to be about INR11t in FY19 (Exhibit 12), and states are budgeted to borrow similar amount as the center for the first time in India s economic history. Nevertheless, gross market borrowings of the general government (center + states) are budgeted to fall from 6.1% of GDP in to 5.9% in, marking the lowest level in eleven years (Exhibit 13). April 218 17

Exhibit 13: Gross market borrowings by the general government (% of GDP) (% of GDP) Centre All states 2..4.5 1.5 1.3.5.6.5 3.4.4 2..5.5.5 3.1 2. 2.8.7.7.6.8 1.2 1.8 4.6 4.3 4.6 4.8 4.9 4.8 1.2 2.5 2.1.6.5 1.3 7. 3.5 3.4 3.4 4.8 1.8 1.3 1.8 1.7 1.9 2.1 2.5 2.5 2.9 5.6 5.8 5.6 5. 4.7 4.3 3.8 3.6 3. FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 Source: Union/State Budgets, RBI, CEIC, MoSL Net borrowings of the general government will absorb 21.8% of nongovernment financial savings in FY19, lower than 23.1% in the recently concluded year Fiscal borrowings unlikely to crowd out private sector As the government plans to borrow record-high amount from the markets in FY19, could it tighten market liquidity and potentially crowd out private investments? We don t think so. From a market liquidity perspective, net borrowings are more important than gross borrowings. And net market borrowings of GG are budgeted to fall from 4.8% of GDP in FY18 to 4.5% in FY19. While states have budgeted a rise in net borrowings from 2% of GDP in FY18 to 2.3% in FY19, the center has budgeted a sharp fall from 2.7% to 2.2% of GDP in FY19. Like other sectors, the government also borrows from the non-government financial savings of the domestic sector, which comprises corporate savings and households net financial savings. Our estimates/forecasts suggest that nongovernment financial savings of the economy fell from 22.6% of GDP in to 2.8% in FY18 and further to 2.5% in FY19 (Exhibit 14). If so, it implies that net borrowings of the general government will absorb 21.8% of non-government financial savings in FY19, lower than 23.1% in the recently concluded year (Exhibit 15). Accordingly, we don t expect record borrowings by the government to tighten liquidity in the economy or crowd out private investments. Nevertheless, gross borrowings, inflation prospects and the duration/maturity profile of bonds may play a more important role for bond yields, and thus, even though the liquidity situation is unlikely to turn tight this year, the benchmark yield could go either way. Exhibit 14: Domestic savings expected to be at 15-year lowest level in FY19 (% of GDP) 45 Government Physical savings Non-government financial savings Exhibit 15: of which ~22% - lower than ~23% in FY18 - is expected to be absorbed by general government (%) 4 (%) Absorption of domestic savings* by government 3 15-15 3 2 1 (% of GDP) FY91 FY95 FY99 FY3 FY7 FY11 FY19F FY1 FY3 FY5 FY7 FY9 FY11 FY19F FY18 and FY19 are our forecasts * Non-government financial savings Source: Union/State Budgets, RBI, CEIC, MoSL April 218 18

Theme #3 How does fiscal spending behave during election years? Unlike commonly perceived, we don t find evidence of any extraordinary surge in fiscal spending (of the central or general government) in an election year. While core revenue spending (more relevant from election perspective) grew faster in FY99 and FY9, it grew slower in FY4 and. What, however, is interesting to note which could be entirely coincidental is that the election results have been in line with movements in fiscal spending. The incumbents restored power in FY99 and FY9 when spending grew faster, but lost elections when spending grew slowly. Fiscal spending is budgeted to grow slowly in FY19 also. We also didn t find any uniform trends in capital spending during election years. FY19 budgets hold more importance than other years because of general elections in May 219. Therefore, we have attempted to understand if fiscal spending witnesses any extraordinary movements during election years (FY99, FY4, FY9 and ). If yes, what have been their implications? And of course, what are the takeaways, if any, for the upcoming elections? Fiscal spending during election years and its influence on election results Instead of analyzing only the center s budget, we decided to analyze spending patterns of the general government (center and states) because a large number of states have their election schedules coinciding with the general elections. As many as ten states AP, AR, CT, HR, MP, MH, OD, RJ, SK and TG accounting for ~4% of national GDP, will have elections in 219. Therefore, we analyze the patterns in real core revenue spending (revenue spending less interest payments deflated by GFCE deflator) of the general government. We find that spending growth during the election year and the election results are linked Based on the past five elections since the late 199s, we find that spending growth during the election year and the election results are linked (Exhibit 16). In FY99, real core revenue spending grew sharply by ~18% and the Vajpayee government retained power in 1999. In FY4, however, fiscal spending growth was only 4.4% and the NDA lost elections in 24. In FY9, core revenue spending grew sharply by 2% and the UPA was re-elected in 29 but lost in 214, when spending growth was only 1.5% in. Our analysis of FY19 budgets confirms that real core revenue spending is budgeted to grow 6.6%, slower than 8.4% average growth in the previous three years (please see Exhibit 16). Will history repeat in 219? April 218 19

Exhibit 16: Real core revenue spending of general government during election years 25 2 15 1 5 (% YoY) NDA retained power in 1999 NDA lost in 24 Real core revenue spending of GG UPA retained power in 29 UPA lost in 214 Will history repeat in 219? FY97 FY99 FY1 FY3 FY5 FY7 FY9 FY11 GG core revenue spending deflated by GFCE deflator Source: Union/State Budgets, RBI, CEIC, MoSL We also looked at the core revenue spending growth of the center and the states separately and noticed that the movements in the center s spending follow the spending pattern of the general government (Exhibit 17). States spending, however, has been more volatile, and in fact, grew faster in FY4, when the center s spending growth moderated (Exhibit 18). Exhibit 17: Core revenue spending of the center during election years follows the pattern in GG spending (% YoY) Core revenue spending of center Exhibit 18: however, core revenue spending of states is more volatile (% YoY) Core revenue spending of states FY95 FY99 FY3 FY7 FY11 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MoSL There is no apparent uniform pattern in the government s capital spending during election years What happens to capital spending during election years? While there are links between core revenue spending growth and elections results, there is no such apparent uniform pattern in the government s capital spending during election years (Exhibit 19). One important point, however, one can notice is that capex growth during NDA regimes (FY99 and FY4) was higher than that in UPA regimes (FY9 and ). For FY19 also, capital spending of the general government is budgeted to grow 11.6%, better than 1.8% in. April 218 2

Exhibit 19: Capital spending of general government during election years 6 4 2-2 (% YoY) Capital spending of general government -4 FY97 FY99 FY1 FY3 FY5 FY7 FY9 FY11 Source: Union/State Budgets, RBI, CEIC, MoSL Here also, while the movements in center s capital spending follow the trends in GG s capex, states capital spending is more volatile (Exhibit 2-21). Further, capital spending of states in FY9 was much better than the sharp decline in the center s capital spending. In FY19, states capital spending is budgeted to grow 12.5%, better than ~1% growth budgeted by the center. Exhibit 2: Capital spending of the center has been more volatile than core revenue spending (% YoY) Capital spending of center Exhibit 21: as has been the capital spending of states versus their core revenue spending (% YoY) Capital spending of states FY95 FY99 FY3 FY7 FY11 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MoSL April 218 21

Theme #4 How much fiscal support is budgeted for the rural sector in FY19? Notwithstanding the recent concerns regarding stress in the rural sector, real rural spending by the general government is budgeted to grow only 6.6% in FY19, versus an average growth of 16.3% during the previous four years. For states, capital spending is budgeted to grow faster than revenue spending in the rural sector. It must, however, be noted that the share of rural spending in total spending has increased sharply for both the center and states during the recent years to the highest level in two decades. Real rural spending by the general government is also budgeted to grow only 6.6% in FY19, the slowest pace in five years The importance of rural sector for the economy and the government is unarguable. As discussed above, notwithstanding election year, there is no spike in real fiscal spending of the general government (center + states) in. It, then, does not come as a surprise that real rural spending by the general government is also budgeted to grow only 6.6% in FY19, the slowest pace in five years (Exhibit 22). Exhibit 22: Rural spending growth by 17 states (% YoY) 3 (% YoY) Combined real spending on rural sector Rural spending budgeted to grow 6.6% in FY19, after average growth of 16.4% in the past four years 2 21.5 1 5.2 4.1 6.6-1 (7.) FY99 FY1 FY3 FY5 FY7 FY9 FY11 Deflated by CPI for Rural Laborers (RL) Highlighted areas are election years Source: Union/State Budgets, RBI, CEIC, MOSL Rural spending by both the center and states is budgeted to grow much slower than in the past few years. While the center has budgeted a growth of 8.6% in rural spending in FY19 as against an average growth of 25.6% in the past two years (Exhibit 23), states have budgeted 9.9% growth in rural spending versus an average growth of 23.5% in the past four years (Exhibit 24). April 218 22

Exhibit 23: Center has budgeted 8.6% growth in rural spending in FY19 75 5 (% YoY) Rural spending by center* Exhibit 24: and states have also budgeted 5-year slowest growth of 9.9% 4 3 (% YoY) Rural spending by states# 25 8.6 2 1 9.9 (25) FY1 FY4 FY7 FY1 FY1 FY4 FY7 FY1 * Spending on Agriculture + Rural development Source: Union Budget documents, CEIC, MoSL # Spending on Agriculture + Rural development + Irrigation Source: State Budgets, CEIC, MoSL While revenue spending by states in the rural sector is budgeted to grow at 15- year lowest level of 5.3% in FY19, capital spending is budgeted to grow strongly at ~22% For states, although rural spending is budgeted to grow at 5-year slowest growth of 9.9%, it is entirely because of slower growth in the revenue spending in the rural sector. While revenue spending in the rural sector is budgeted to grow at 15-year slowest level of 5.3% in FY19, capital spending is budgeted to grow strongly at ~22% (Exhibit 25). Consequently, the share of capital spending in the total rural spending is budgeted to increase to above 3% in FY19 (Exhibit 26). Exhibit 25: Revenue and capital spending in the rural sector by states during the past decade (% YoY) (% YoY) Revenue Capital Exhibit 26: Share of revenue and capital spending in total rural spending by states (%) Revenue spending Capital spending 22.1 41.2 26.5 3.7 5.3 66.5 59.5 7.6 69.3 FY9 FY11 FY4 FY7 FY1 Source: State Budgets, RBI, CEIC, MOSL During the past five years, capital spending in the rural sector has grown slightly faster than the growth in revenue spending in the rural sector Further, during the past five years (NDA-II period over -19), capital spending in the rural sector has grown slightly faster than the growth in revenue (or consumption) spending in the rural sector (Exhibit 27). This has been in stark contrast to the trend of the previous five years (UPA-II period over FY1-14), when capital spending in the rural sector was an abysmally low 3.4%, while revenue spending was strong at 14.1%. Another important observation is that while growth in capital spending in the rural sector was high at 21.5% during the NDA-II period, it was even higher at 23.6% during the UPA-I period (FY5-9). In comparison, revenue spending in the rural sector grew ~21% during NDA-II period, which was, by far, the highest growth seen during the past two decades. Consequently, rural spending growth was also the highest. This is also apparent from the fact that the share of rural spending by the April 218 23

general government crossed 14% of total spending for the first time since the late 199s (Exhibit 28). Notably, it was higher than 17% for states, while it was ~7% for the center. Exhibit 27: Revenue and capital spending in the rural sector by states during the past two decades (% CAGR) 25 Revenue Capital Total Exhibit 28: Share of rural spending in total spending has risen to the highest level since the late 199s (%) 2 Rural spending by GG 2 18.8 2.8 15 15 1 5 6.1 1.2 1 5 FY-4 FY5-9 FY1-14 -19BE FY98 FY1 FY4 FY7 FY1 Source: Union/State Budgets, RBI, CEIC, MOSL A look at the rural spending by individual states confirms that Maharashtra (MH) and Uttar Pradesh (UP) the two largest states in terms of fiscal spending have budgeted a decline in rural spending in FY19, primarily because both the states had implemented a farm loan waiver in FY18 due to which rural spending grew ~6% and 8%, respectively in (Exhibit 29). Gujarat has also budgeted a decline in rural spending in FY19, while Punjab (PB) has budgeted the highest growth of 47.5% in FY19. Exhibit 29: Rural spending growth by 2 states (% YoY) (% YoY) Average growth in last two years 22. 3.2 6.1 29.7 15.1 25.3 14.6 9.4 33.5 32.3 12.7 47.5 2.7 12.6 36.7 23.5 17.5 9.9 (1.) (2.6) (19.4) AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB All Source: State Budgets, RBI, CEIC, MOSL April 218 24

Theme #5 Where is the expected boost from 7th pay revisions? Sixteen out of 18 states except Punjab and West Bengal due for pay revisions have done so between and FY19. As per states budgets, the growth in aggregate salary & wage bill for all states combined was 14.4% in and budgeted at 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1. Although pay awards have been revised, the positive impact on the macro economy, and the corresponding adverse impact on states finances, has been muted since the states have amortized the pay commission awards by 2-3 years in many cases. Unlike during the previous pay revisions, states have spread the commission awards over 4-5 years beginning, which has diluted the impact of such revisions After implementation of the seventh central pay commission in, states have followed and implemented pay revisions for their employees. Nevertheless, unlike during the previous pay revisions, states have spread the commission awards over 4-5 years beginning, which has diluted the impact of such revisions. Many states including Bihar (BR), Odisha (OR) and Tamil Nadu (TN), implemented the pay revisions during the last year (FY18), while three more states Jammu & Kashmir (J&K), Karnataka (KA) and Maharashtra (MH) have provided for the pay revisions in FY19 (please see Exhibit 32 on the next page). Notably, Tamil Nadu (TN), which is known for its precarious financial situation, revised the pay and allowances of government employees and pension for pensioners with effect from October 1, 217. There has been a substantial increase in salaries and pension components in the Revised Estimates for 217-218 and the Budget Estimates for 218-219, owing to the implementation of the Seventh Pay Commission recommendations, Deputy Chief Minister, Mr Thiru O Panneerselvam, stated in his speech on March 15, 218. Exhibit 3: Annual change in aggregate salary & wages (S&W) spending budgeted by 2 states (% YoY) Aggregare salary bill of 2 states 26.4 29.8 17. 15.5 11.6 1.1 1.6 8.7 11. 14.4 16.6 FY9 FY11 Shaded regions represent periods of pay revisions Exhibit 31: Share of different states in salary and wages (S&W) expenditure in (% of total) UP, 14.7 PB, 3.1 WB, 6. TG, 3.1 TN, 7.4 RJ, 7. OR, 3.8 AP, 5. BH, CT, 2.9 2.3 GJ, 4.2 UK, 2. HR, 2.9 HP, 1.6 MH, 14.7 JK, 3.4 JH, 1.8 KA, 4.7 KL, 4.7 MP, 4.6 As % of aggregate S&W of 2 states Source: State Budgets, RBI, CEIC, MOSL Aggregate salary & wage bill for all states combined grew 14.4% in and budgeted to grow 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1 Not surprisingly then, the growth in aggregate salary & wage bill for all states combined was 14.4% in and budgeted at 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1 (Exhibit 3). This is despite the fact that almost all states (except West Bengal (WB) and Punjab (PB)) have provided for the pay revisions. Lower growth this time, however, can be attributed to the fact that states have amortized the pay commission awards over many years. Gujarat (GJ), for example, implemented in, but announced to pay arrears in March 218, May 218 and July 218. Similarly, Maharashtra (MH) has provided for only INR1b in FY19 and the arrears are to be paid in 3-4 installments over subsequent April 218 25

years. As exhibit 31 shows, MH alone accounts for ~15% of the total budget on salary & wages (S&W), similar to Uttar Pradesh (UP), followed by Tamil Nadu (7.4%) and Rajasthan (7%). Exhibit 32: State-wise details of Pay Commission awards States Commentary States not due to announce/yet to implement pay revisions What do numbers say? # - (A)* Andhra Pradesh (AP) Tenth Pay Commission implemented in 214-15. Next is due in 219 (4.1)~ 11.7 15.2 Punjab (PB) No announcement yet 8.5 15.2 2.5 Telangana (TG) Tenth Pay Commission implemented in 214-15. Next is due in 219 ~ 7.8 3.3 West Bengal (WB) Follows its own pay revisions time-table 7.9 12.4 7.9 States which implemented Seventh Pay Commission in 216-17 Gujarat (GJ) Implemented in 216-17 w.e.f. January 216. Arrears to be paid in 218 6.4 14.9 1. Haryana (HR) Implemented in 216-17 with effect from January 216 11.8 16.2 12.4 Himachal Pradesh (HP) Implemented in 216-17 9.1 16.9 17. Kerala (KL) Provisions for 1 th Pay Commission spread over two years 13.3 12.1 5. Uttar Pradesh (UP) Announced in December 216 and implemented in January 217. Arrears to be settled in two installments 14.3 1.6 2.2 Uttarakhand (UK) Announced in December 216 and implemented in January 217 12.8 17.2 22.8 States which made provisions for Seventh Pay Commission in 217-18 Bihar (BH) Implemented in May 217 with effect from April 217 4.2 2.8 11.1 Chhattisgarh (CT) Implemented in 217-18 7.7 34.8 6.8 Jharkhand (JH) Implemented in 217-18 with effect from January 216 8.5 33.2 11.3 Higher salaries to be paid in July 217 with effect from January 216. Madhya Pradesh (MP) Arrears to be paid in three installments; May every year beginning FY19 Implemented in September 217 w.e.f. January 216. Government to clear Odisha (OR) arrears partially in FY19 5.6 24.5 11.8 13.6 14.1 24.2 Rajasthan (RJ) Sufficient provisions made in 217-18 budget 15.9 33.1 22.5 Tamil Nadu (TN) Implemented on October 1 st 217 8. 12.6 15.5 States which made provisions for Seventh Pay Commission in 218-19 Jammu & Kashmir To be implemented from April 218 with effect from January 216 12.1 16.1 35.9 Karnataka (KA) Pay Commission expected to be implemented from July 1 st, 218 6.5 12.9 34.6 Maharashtra (MH) Implemented w.e.f. January 216. Arrears to be paid in 3-4 installments 6.5 16.3 22.5 Total (2 states) 1.1 14.4 16.6 # Change in salaries & wages spending bill for states Source: State Budgets, MOSL * Average of the three years up to ~ Since AP was bifurcated in 214. Data is not comparable April 218 26

A look at the growth in S&W bill for individual states confirms that J&K and KA have budgeted the highest growth of ~35% because of the pay revisions this year (Exhibit 33). Many other states such as OR, RJ and UP have also budgeted for high growth (of >2%) because the arrears are planned to be paid this year. MH has also budgeted for slower growth (than J&K and KA) because it has not provided for the arrears in FY19. Exhibit 33: Budgeted growth in salary & wages by 2 states (% YoY) 35.9 34.6 16.6 15.2 11. 6.8 1. 12.4 17. 11.3 5. 11.8 22.5 24.2 2.5 22.5 15.5 3.3 2.2 22.8 7.9 All AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB Source: State Budgets, RBI, CEIC, MOSL Salary & wages account for 22.2% of total spending by all states in FY19 and as much as ~27% of states revenue spending It is also interesting to note that salary & wages (excluding pensions) account for 22.2% of total spending by all states in FY19 (Exhibit 34) and as much as ~27% of states revenue spending. Among the 2 states, Uttar Pradesh (UP) has the highest share, with S&W accounting for about one-third of total spending in FY19, while the lowest share (~12%) is for Bihar (BH). The share of salary & wages is also high at ~3% in Maharashtra (MH). Exhibit 34: Share of salary & wages in total spending (%) 3.3 3.4 3.8 32.5 11.9 12.8 16.5 16.7 17.1 17.9 19.3 19.8 2. 22.2 23.1 23.3 23.3 24.3 25. 26. 26. BH WB KA JH MP GJ AP CT HR All TG OR RJ UK TN PB KL MH HP JK UP Source: State Budgets, RBI, CEIC, MOSL April 218 27

PART II. Key highlights from states finances In part II, we delve deeper into the results from the analysis of the pooled state budgets. This part is divided into three sections. Key highlights are: II.1. What do the headline numbers suggest? On an aggregate basis, states have budgeted a fiscal deficit of 2.5% of GDP in FY19, the lowest in five years. Notably, states deficit in was 2.8% of GDP, higher than 2.6% budgeted last year. For FY19, GJ and MH have budgeted the least deficit, while JK, HP and PB have budgeted the highest deficit. States have consistently increased their reliance on market borrowings to finance fiscal deficit in the past few years. On aggregate basis, states gross borrowings are budgeted to rise to INR5.5t or 2.9% of GDP, while net borrowings are expected to rise to INR4.2t or 2.3% of GDP in FY19. Aggregate gross debt of states crossed 25% of GDP in, from the recent low of 21.7% in. It is budgeted to rise marginally to 25.3% of GDP in FY19. States have not provided GST data on uniform basis, and thus, it is difficult to estimate the budgeted growth or monthly run-rate expected in GST collection in. Notwithstanding the election year, states total spending is budgeted to grow 11.4% in FY19, marking the slowest pace in 13 years II.2. What do receipt estimates tell us? Following a record high growth of 22.3% in, total receipts of all states are budgeted to grow 13.5% in FY19. For the first time in five years, states have budgeted a higher growth (of 14.7%) in own receipts, which account for ~53% of total receipts, in comparison to the support from the center (budgeted to grow 12.7%). States have not provided GST data on uniform basis, and thus, it is difficult to estimate the budgeted growth or monthly run-rate expected in GST collection in. However, on an aggregate basis, GST collections are expected to be ~43% of states own taxes in FY19, ranging from ~63% for J&K to ~15% for AP. II.3. Where are the states planning to spend? As many as 1 states, accounting for ~4% of national GDP, will have elections in 219. Notwithstanding the election year, states total spending is budgeted to grow 11.4% in FY19, marking the slowest pace in 13 years. Almost one-third of total spending is budgeted to be spent on the rural and education sectors, while interest payments account for ~1%. Within total spending, the states have budgeted 11.2% growth in revenue spending, as against record-high growth of 19.2% in and 12.5% in capital spending versus a decline of ~3% in. Although almost all states have implemented the pay revisions partly or fully, aggregate bill on salary & wages is budgeted to grow 16.6% in FY19 as against 14.4% in. In contrast, the average growth in S&W bill during the previous pay revisions was ~25% between FY9-11. April 218 28

II.1. What do the headline numbers suggest? On an aggregate basis, states have budgeted a fiscal deficit of 2.5% of GDP in FY19, lowest in the five years. Notably, states deficit in was 2.8% of GDP, higher than 2.6% budgeted last year. For FY19, GJ and MH have budgeted the least deficit of sub-2% of GSDP, while JK, HP and PB have budgeted the highest deficit of over 4% of GSDP. States have consistently increased their reliance on market borrowings to finance fiscal deficit in the past few years. On aggregate basis, states gross borrowings are budgeted to rise to INR5.5t or 2.9% of GDP, while net borrowings are expected to rise to INR4.2t or 2.3% of GDP in FY19. Aggregate gross debt of states crossed 25% of GDP in, from the recent low of 21.7% in. It is budgeted to rise marginally to 25.3% of GDP in FY19. While the states had overachieved their fiscal deficit targets for almost the entire decade up to (barring FY9), actual deficit has turned out to be higher than BEs during the past four successive years Fiscal deficit target missed for fourth consecutive year in FY18: Fiscal deficit targets are met during good periods, when the private sector is buoyant enough to take care of the economy. However, as economic growth weakens, the government has to support the economy by shedding its deficit targets. How long the government can support the economy depends on fiscal capacity. This is exactly what seems to have happened in the past many years. While the states had over-achieved their fiscal deficit budget estimates (BEs) for almost the entire decade up to (barring FY9), actual (and revised estimate (RE) for FY18) deficit has turned out to be higher than BEs during the past four successive years (Exhibit 35). In and, while states had budgeted deficit of 2.3% and 2.7% of GDP, respectively, the actual deficit was higher by.8pp each year (Exhibit 36). For FY18, states have revised their combined deficit from 2.5% of GDP to 2.8%. Exhibit 35: Comparison of BEs and REs/actual fiscal deficit of 2 states* since FY4 (% of GDP) Exhibit 36: One-off schemes led to serious underachievement of deficit targets in recent years 6 Budget estimates (BEs) Actual/REs Under/Over-achievement of GFD.8.8 5.4.4.3.3 3 2 FY4 FY6 FY8 FY1 FY12 FY18 * Not for all states (.2) (.5) (.6) (.6) (.) (.1) (.3) (.5) (.5) FY4 FY6 FY8 FY1 FY12 FY18 Source: State Budgets, RBI, CEIC, MOSL However, the past few years were actually marred, with some exceptional schemes that burdened states finances However, to be fair, the past few years were actually marred, with some exceptional schemes that burdened states finances. The announcement of UDAY in December 215 and its implementation in subsequent years, and the approval of 7 th central pay commission in July 216 made states follow the center in mid-. Even in FY18, some states like BH, OR and TN had not budgeted for pay revisions in the BEs, but implemented 7 th pay commission during the year. April 218 29

States have budgeted aggregate deficit of 2.5% of GDP, the lowest in five years Fiscal deficit budgeted at 5-year lowest level in FY19 : As far as the aggregate fiscal deficit for FY19 is concerned, states have budgeted aggregate deficit of 2.5% of GDP, the lowest in five years (Exhibit 37). In absolute terms, however, states deficit declined in FY18 and is budgeted to remain broadly unchanged at INR4.64t in FY19 also. Exhibit 37: Long-run trend in states fiscal deficit Fiscal deficit (INRb) % of GDP 3.2 2.8 2.7 2.3 2.6 2.5 2.6 2.8 4.1 4.5 4. 4. 3.9 4.2 3.3 2.4 1.8 1.7 2.4 2.9 2.1 1.9 2. 2.2 2.6 3.1 3.5 2.8 2.5 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 188 189 29 24 273 39 368 435 738 91 879 943 997 1,26 1,78 91 794 824 1,349 1,896 1,627 1,69 1,956 2,482 3,283 4,257 5,389 4,656 4,635 Source: State Budgets, RBI, CEIC, MOSL with GJ budgeting lowest and JK budgeting highest deficit: A look at the FY19 budgeted fiscal deficit for individual states reveals that Gujarat (GJ) and Maharashtra (MH) are the only states that have budgeted deficit of sub-2% of GSDP. On the contrary, Jammu & Kashmir (JK), Himachal Pradesh (HP) and Punjab (PB) are the only three states that have budgeted FY19 deficit at over 4% of GSDP (Exhibit 38). Exhibit 38: fiscal deficit for individual states fiscal deficit 4.9 5.4 1.7 1.8 2.2 2.4 2.5 2.5 2.5 2.8 2.8 2.8 2.8 3. 3. 3.1 3.1 3.2 3.5 3.5 4.1 GJ MH BH JH WB All KA UK AP TN HR UP RJ CT KL MP TG OR PB HP JK Source: State Budgets, RBI, CEIC, MOSL Further, while the aggregate fiscal deficit of all states was revised up from 2.5% of GDP to 2.8% of GDP in FY18, some states like JK, PB and GJ have actually overachieved their deficit targets. Nevertheless, the slippages from BH, HP, WB, RJ and AP were enough to drive the aggregate deficit higher (Exhibit 39). April 218 3

Exhibit 39: How did states fare in FY18? GJ (% of GDP) 1.7.2 RE-BE MH (.3) 1.9 JH (.2) 2.5 UK (.1) 2.5 KA All TN (.1) (.2) (.) 2.7 2.8 2.8 HR 2.8. UP WB (1.3) (.) 3. 3. TG KL CT MP OR 3.2 3.3 3.3 3.4 3.5.2.1.1.1. RJ AP (.5) (.5) 3.5 3.5 PB 4.4.6 JK 4.5 3.9 HP (1.4) 4.9 BH (4.6) 7.5 Source: State Budgets, RBI, CEIC, MOSL States are planning to finance as much as 91% of its aggregate fiscal deficit by market borrowings in FY19 States are more reliant on market borrowings now: While states aggregate fiscal deficit has contracted in absolute terms in FY18, gross/net market borrowings have continued to surge, as states are turning more dependent on market borrowings than other sources of financing. Gross/net market borrowings of states have risen from 1.8%/1.5% of GDP in FY12 to 2.5%/2.1% of GDP in FY18 and are budgeted to rise further to 2.9%/2.3% in FY19 (Exhibit 4). Our calculations suggest that states are planning to finance as much as 91% of its aggregate fiscal deficit by market borrowings in FY19 (Exhibit 41). April 218 31

Exhibit 4: Gross and net market borrowings by states (% of GDP) Gross borrowings Net borrowings 2.9 2.5 2.5 2. 2.1 2.2 2.3 1.8 1.8 1.9 2.1 1.7 1.7 1.9 1.5 1.7 1.3 1.5 1.5 1.1 Exhibit 41: Net market borrowings to account for ~9% of fiscal deficit in (%) 1 75 5 (% of FD) 25 FY1 FY11 FY12 FY91 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL A look at the individual states shows that Gujarat (GJ) and Maharashtra (MH) have budgeted for the least net (gross) market borrowings worth 1.6% (2.2%) and 1.7% (2.3%) of GSDP, respectively, while Jammu & Kashmir (JK), Rajasthan (RJ), Telangana (TG) and West Bengal (WB) have budgeted for net borrowings of above 3% of GSDP the highest for FY19 (Exhibit 42). Exhibit 42: Budgeted gross/net borrowings by individual states in FY19 (% of GDP) Net Repayments.7.7 2.7 2.9. 2.5.6 1.6.5 1.4 2.8 2.5 1.1 3.2.5.5 2.1 2.1.7 2.6.6 2.3.6 1.7.2 1. 2.5 2.8.7 3.1.7 2.5.6 3.2.9.4 2.5 2.6 1.2 3..7 2.3 AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB All Source: State Budgets, RBI, CEIC, MOSL States debt at 25.3% of GDP in FY19 highest in nine years: Finally, it is important to note that as states fiscal deficit widened during the past four years, states aggregate gross debt (or total liabilities) also turned unfavorable. From its twodecade low of 21.7% of GDP in, aggregate debt crossed 25% in for the first time since FY1. Aggregate debt is budgeted to increase to 25.3% of GDP in FY19 (Exhibit 43). April 218 32

Exhibit 43: Gross debt of states crossed 25% of GDP in (% of GDP) Total liabilities 21.9 21.8 21.7 21.1 2.7 2.3 2.1 21. 22.2 25.2 27.3 29.3 31. 31.8 31.3 31.1 28.9 26.6 26.1 25.5 23.5 22.8 22.2 22. 21.7 23.3 24.8 25.2 25.3 FY91 FY93 FY95 FY97 FY99 FY1 FY3 FY5 FY7 FY9 FY11 Source: State Budgets, RBI, CEIC, MOSL A look at the debt level for individual states confirms that while GJ and MH have the least leverage (<17% of GSDP), JK and PB have the highest debt-to-gsdp ratio in excess of 4% (Exhibit 44). Exhibit 44: Gross debt of individual states in FY19 (% of GSDP) 16. 16.5 18.1 19.2 2.7 2.9 21.4 Debt-to-GDP 23.4 24.3 25.3 26.3 26.7 27. 28.7 29.8 3.7 31.8 32.8 37.6 4.8 44.7 GJ MH CT KA OR TN TG HR UK All MP BH JH AP UP KL HP RJ WB PB JK Source: State Budgets, RBI, CEIC, MOSL April 218 33

II.2. What do aggregate receipt estimates tell us? Following a record high growth of 22.3% in, total receipts of all states are budgeted to grow 13.5% in FY19. For the first time in five years, states have budgeted a higher growth (of 14.7%) in own receipts, which account for ~53% of total receipts, in comparison to the support from the center (budgeted to grow 12.7%). States have not provided GST data on uniform basis, and thus, it is difficult to estimate the budgeted growth or monthly run-rate expected in GST collection in FY19. However, on an aggregate basis, GST collections are expected to be ~43% of states own taxes in FY19, ranging from ~63% for JK to ~15% for AP. As a percentage of GDP, states total receipts budgeted to rise further to 15.4% in FY19 Following a record high growth of 22.3% in, total receipts of all states are budgeted to grow 13.5% in FY19 (Exhibit 45). As a percentage of GDP, states total receipts are estimated to have risen to all-time high of 15.1% in and are budgeted to rise even further to 15.4% in FY19 (Exhibit 46). Exhibit 45: Total receipts of states are budgeted to grow 13.5% in FY19 25 2 15 (% YoY) Total receipts Exhibit 46: which will help total receipts to rise to a new high of 15.4% of GDP (% of GDP) (% of GDP) 1.9 Total receipts 12.1 13.6 15.4 1 5 FY3 FY5 FY7 FY9 FY11 FY3 FY5 FY7 FY9 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL A look at the composition of states total receipts (Exhibit 47) confirms that ~43% are the states own taxes, more than one-fourth (26.5%) are from share in central taxes, almost one-fifth (2.8%) are in the form of grants from the center, and the remaining are states own-non-tax receipts and non-debt capital receipts (NDCR). April 218 34

Exhibit 47: States own receipts account for more than half of total receipts (% of total receipts) Own nontax receipts, 7.7 Grants from center, 2.8 NDCR, 2. Exhibit 48: which is expected to grow faster than center s support for the first time in five years in FY19 (%) 3 2 States' own receipts Support from the center# Share in central taxes, 26.5 Own taxes, 43. 1-1 FY98 FY1 FY4 FY7 FY1 NDCR = Non-debt capital receipts # Share in central taxes + Grants from center Source: Union/State Budgets, RBI, CEIC, MOSL Share of states own receipts in their total receipts has fallen consistently from 58.5% in to 54.6% in and is budgeted to fall further to 52.7% in FY19 Although the center accepted to devolve a higher share of taxes with states in, it is important to note that support from the center (sum of share in central taxes + grants from center) has risen faster than states own receipts from (Exhibit 48). Not surprisingly then, the share of states own receipts in their total receipts has fallen consistently from more than 6% to its all-time low of 52.2% in ; it is, however, is budgeted to rise to 52.7% in FY19 (Exhibit 49). Exhibit 49: Share of own taxes and support from center in total receipts in FY19 Own taxes Own non-tax receipts Support from center* 36.8 36.9 36.7 36.2 36.3 38.8 39.9 41.2 41.2 4.7 4.7 39.6 38.1 38.1 41.5 45.4 47. 47.8 47.3 12.9 12.2 12.6 11.4 12.5 1.9 11.8 12.2 11.6 11.5 9.7 8.9 9.3 9.6 8.9 8.3 8.1 7.6 7.7 47.5 48. 49.3 47.3 49. 48.3 46.9 45.4 45.6 46.8 49. 5. 52. 51.8 48.4 45.8 44. 42.4 43. FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY18 RE FY19 BE Source: State Budgets, RBI, CEIC, MOSL A look at the receipts growth by individual states confirms that Punjab (PB), Andhra Pradesh (AP) and Telangana (TG) have budgeted the highest growth of above 2% in total receipts for FY19, while Jharkhand (JH), Chhattisgarh (CT) and Gujarat (GJ) have budgeted the least growth of sub-7% in their total receipts for FY19 (Exhibit 5). April 218 35

Exhibit 5: Budgeted growth in states own taxes and total receipts in FY19 (% YoY) Total receipts Own taxes 13.5 26.1 19. 6.2 6.8 9. 8.4 14.9 4.8 11.5 16.4 14. 1.9 11.7 29.7 11.7 1.4 21.8 15.9 18.8 9.5 All AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB Source: State Budgets, RBI, CEIC, MOSL While own receipts account for ~53% of states total receipts, they range from as low as 22.6% for Bihar (BH) and as high as ~8% for Haryana (HR) Further, while own receipts (own taxes + own non-tax receipts and NDCR) account for ~53% of states total receipts, they range from as low as 22.6% for Bihar (BH) and as high as ~8% for Haryana (HR). It means that BH is most dependent on the center (Exhibit 51). On the other hand, while Punjab (PB) is among the least dependent on the center, it has budgeted the highest growth of 28.9% in support from the center, higher than the average growth of 12.3% and 24.8% budgeted by BH. Exhibit 51: Share of own taxes and support from center in total receipts in FY19 Own receipts Support from center 77.4 22.6 68.4 66.3 61.1 59. 58.9 56.5 55.7 54.2 52.8 48.3 47.3 43.7 31.6 33.7 38.9 41. 41.1 43.5 44.3 45.8 47.2 51.7 52.7 56.3 34.8 31.4 29. 28.8 28.5 28.4 26.1 19.8 65.2 68.6 71. 71.2 71.5 71.6 73.9 8.2 BH JK HP OR JH WB MP UP AP CT UK All RJ TG KA KL TN GJ PB MH HR Source: State Budgets, RBI, CEIC, MOSL April 218 36

What do the GST estimates tell us? Unfortunately, not much On an aggregate basis, states have budgeted 15% growth in own taxes, which account for ~43% of states total receipts, following 17.8% growth in (Exhibit 52-53). A detailed break-up of states own taxes reveals that SGST accounts for ~43% of states own taxes, while sales tax (which primarily includes GST exemptions such as selected fuel products and alcohol) accounts for almost a quarter of the states own taxes. Taxes on property and capital transactions (PCT) and excise taxes (almost entirely on alcohol) account for 11-12% of own taxes. Exhibit 52: States own taxes budgeted to grow 15% in FY19 32 (% YoY) Own taxes 24 16 Exhibit 53: Detailed break-up of states own taxes,.9 Electricity, 3.3 Vehicles, 5.6 SGST, 42.9 8 FY3 FY5 FY7 FY9 FY11 Tax on Sales,Trade etc, 24.7 Excise, 11.5 PCT, 11.1 Source: State Budgets, RBI, CEIC, MOSL With the implementation of goods & services tax (GST) from July 217, FY19 will be the first full-year budget with GST implementation. To gain better understanding of GST estimates by states, we have collected and presented all data provided by 2 states in Exhibit 54 for and. (Only three states Punjab (PB), Uttar Pradesh (UP) and Uttarakhand (UK) presented for GST also; however, we have ignored them here). Due to lack of uniformity in data reporting, however, it is difficult to make a credible estimate on GST expectations budgeted by states for FY19 Due to lack of uniformity in data reporting, however, it is difficult to make a credible estimate on GST expectations budgeted by states for FY19. There are at least four inconsistencies in GST data reporting by states: While all states have provided State GST (SGST) data for, BH and PB have not provided SGST for, when they have actually provided for CGST and IGST, Only three states AP, KA and TG have provided an amount of compensation cess separately, while all other states have presumed to have included in their SGST, Some states have provided the break-up of central share in the form of CGST and IGST, which get included in the states share in central taxes, while some states have not provided these details, and Three states CT, MH and WB have provided data for IGST shared by the center with the state, but not CGST, which must be devolved with the state. April 218 37

Exhibit 54: Data reported for GST by 2 states INR m CGST SGST IGST Total CGST SGST IGST Total AP 4,31 54,26* 29,273 123,564 19,191 94,92* 9,41 213,152 BH 89,873-65,72 155,593 245,141 15, 2,297 415,438 CT - 32,128 42,49 74,537-5,66 71,443 121,51 GJ 28,678 25, 2,971 299,648 78,222 427,5 6,476 512,198 HR - 125,2-125,2-237,6-237,6 HP 6,63 2,654 4,848 32,133 22,152 4,645 1,72 64,498 JK - 36,824-36,824-7,615-7,615 JH - 9, - 9, - 16, - 16, KA 43,825 32,175* 32,47 378,48 119,54 525,5* 9,897 653,936 KL 7 162, - 162,7 1 27,1-27,2 MP 7,187 98,2 51,325 219,712 191,446 21,8 15,851 48,377 MH - 59,767 88,88 598,647-91,43 151,628 1,53,3 OR 43,165 59,5 31,565 134,23 117,739 12, 9,748 247,487 PB 14,664-1,723 25,388 39,999 214,46 3,312 257,716 RJ 51,97 117, 37,365 25,462 139,374 21, 11,54 36,914 TN 37,49 173,93 11,496 312,835 12,39 297,485 135,279 534,82 TG 22,661 129,136* 16,571 168,368 61,812 275,4* 5,118 342,329 UP 9,782 63,735 7,153 8,671 26,683 73,9 2,29 12,792 UK - 286,27-286,27 437,39 494,22 35,583 966,842 WB - 82,7 45,92 128,62 159,458 13,94 99,66 39,58 Separate data for compensation cess is available Source: State Budgets, RBI, CEIC, MOSL One other way to analyze GST-related collection is to find out the share of GST in states own tax receipts (Exhibit 55). On an aggregate basis, ~43% of states own taxes are budgeted to be accounted for by GST. In this methodology also, however, as is apparent from Exhibit 55, AP and JK are two extreme states, with GST accounting for only ~15% in the former, and almost two-third in the latter. Exhibit 55: Share of SGST in states own taxes in FY19 (% of own taxes) 36.1 36.8 37.3 37.7 4.3 41.8 42. 42.8 State GST 46.1 46.7 47.9 48.2 48.4 48.4 49.3 49.4 5.7 52.2 55.1 63.1 14.5 AP RJ MP TG TN UP WB OR All KL CT MH GJ HR BH HP UK KA PB JH JK Source: State Budgets, RBI, CEIC, MOSL April 218 38

II.3. Where are the states planning to spend? As many as 1 states, accounting for ~4% of national GDP, will have elections in 219. Notwithstanding the election year, states total spending is budgeted to grow 11.4% YoY in FY19, marking the slowest pace in 13 years. Almost one-third of total spending is budgeted to be on the rural and education sectors, while interest payments account for ~1%. Within total spending, the states have budgeted 11.2% growth in revenue spending, as against record-high growth of 19.2% in and 12.5% in capital spending versus a decline of ~3% in. Although almost all states have implemented the pay revisions partly or fully, aggregate bill on salary & wages is budgeted to grow 16.6% in FY19 as against 14.4% in. In contrast, the average growth in S&W bill during the previous pay revisions was ~25% between FY9-11. States have budgeted a growth of 11.4% in total spending for FY19, marking the slowest pace in 13 years Normally, the Union Budget is accorded high importance during the general election year. Nevertheless, as many as ten states, accounting for ~4% of national GDP are also scheduled for elections in 219, making state budgets as important as the Union Budget 218-19. Our analysis of state budgets confirms that states have budgeted a growth of 11.4% in total spending for FY19, marking the slowest pace in 13 years and as against ~15% growth in (Exhibit 56). We also notice that spending growth will be the lowest in any election year during the past five elections. Exhibit 56: Total spending by states budgeted to grow at 13-year lowest level 25 2 (% YoY) Total spending 15 1 5 FY95 FY99 FY3 FY7 FY11 Highlighted periods are general election years Source: State Budgets, RBI, CEIC, MoSL In narrow sense, the quality of states spending is better than that of the center Unlike the center, which spends ~3% of its total spending on interest payments giving a large portion to banks and RBI, interest payments account for less than 1% of total spending for states. Further, while capital spending accounts for 12-13% of the Union Budget, about 17% of states spending is on the capital account (Exhibit 57). In that narrow sense, therefore, the quality of states spending is better than that of the center. April 218 39

Exhibit 57: Almost three-fourth of total spending is related to consumption in (% of total spending) Exhibit 58: Almost one-third of total spending in FY19 is spent on the rural and education sectors 18.9 17.3 15.5 16.4 15.3 15.1 15.6 18.9 19.7 16.6 16.8 12.2 11.7 11.3 1.6 1.3 1.4 9.8 9.4 9.6 9.8 9.8, 36.6 Education etc, 15.5 Housing, 1.8 68.9 71.1 73.2 73. 74.3 74.5 74.6 71.7 7.7 73.6 73.5 Interest payments, 9.8 Rural sector, 17.2 FY9 FY1 FY11 FY12 Pension, 9.2 Transport, 4.7 Energy, 5.3 Source: State Budgets, MOSL Further, states spend about one-third of their total spending on the rural (sum of agriculture & allied activities, rural development, and irrigation and flood control) and education (including sports, art & culture) sectors (Exhibit 58). States also spend ~9% on pension, while transport (primarily roads & bridges) receive less than 5% of total spending by states. Total spending by states crossed 16% of GDP in for the first time since liberalization and continued to rise to touch ~18% in Since, states have implemented two major reforms UDAY scheme and pay revisions. Not surprisingly then, total spending by states crossed 16% of GDP in for the first time since liberalization and continued to rise to touch ~18% in (Exhibit 59). Due to slower growth budgeted for FY19, total spending is budgeted to fall slightly to 17.8% of GDP. Within total spending, while revenue spending is budgeted to grow at 3-year low of 11.2%, capital spending is budgeted to grow faster at 12.5% (Exhibit 6). Exhibit 59: States total spending crossed 16% of GDP in and has risen since then (% of GDP) Total spending 17.1 17.8 14.4 14.9 14.2 14.6 15.6 17.9 16.5 14.3 14.9 14.7 14.5 Exhibit 6: Revenue spending is budgeted to grow slowly, while capital spending to grow faster in 45 3 (% YoY) Revenue spending Capital spending 15 FY7 FY8 FY9 FY1 FY11 FY12-15 FY7 FY11 Source: State Budgets, RBI, CEIC, MOSL Core revenue spending is also budgeted to grow 11.2% in FY19, marking the slowest growth in 14 years Core revenue spending (revenue spending excluding interest payments) is also budgeted to grow 11.2% in FY19, marking the slowest growth in 14 years (Exhibit 61). Details of revenue spending (Exhibit 62) reveal that more than half of revenue spending by states is on four areas education (17.9%), rural sector (14.4%), interest payments (11.7%), and pensions (11.1%). April 218 4

Exhibit 61: Core revenue spending is also budgeted to grow at the slowest pace in 14 years in FY19 Exhibit 62: More than half of revenue spending by states on education, rural sector, interest and pensions 25. 2. (% YoY) Core revenue spending Pension, 11.1, 28.1 (% of revenue spending) 15. 1. 5.. FY91 FY95 FY99 FY3 FY7 FY11 Police, 4.6 Interest payments, 11.7 Social security & welfare, 4.5 Transport, Energy, 4.6 Rural 1.8 sector, 14.4 Housing, 1.5 Education etc, 17.9 Source: State Budgets, RBI, CEIC, MOSL Details of capital spending (Exhibit 64) reveal that almost half of capital spending by states is on two areas rural sector (31.5% of which is on irrigation, the largest component (~2% of capital spending)) and transport sector (19.2%). Exhibit 63: Capital spending is budgeted to grow 12.5% in FY19, following a decline in Exhibit 64: Almost half of capital spending by states on rural sector and transport 75 5 (% YoY) Capital spending (% of capital spending) Transport, 19.2, 13.7 L&A, 6.7 Education etc, 3.5 25-25 FY91 FY95 FY99 FY3 FY7 FY11 Energy, 8.6 Health, 3.4 Rural sector, 31.5 Sanitation, 5.9 Housing, 3.1 Urban devt, 4.5 Source: State Budgets, RBI, CEIC, MOSL April 218 41

Unlike the previous pay revisions, states have spread the commission awards this time over 4-5 years beginning, which has diluted the macro impact of such revisions Where is the expected boost from 7th pay revisions? After implementation of the seventh central pay commission in, states have followed and implemented pay revisions for their employees. Nevertheless, unlike the previous pay revisions, states have spread the commission awards this time over 4-5 years beginning, which has diluted the macro impact of such revisions. Seven states Bihar (BR), Chhattisgarh (CT), Jharkhand (JH), Madhya Pradesh (MP), Odisha (OR), Rajasthan (RJ) and Tamil Nadu (TN), implemented the pay revisions during the last year (FY18), while three more states Jammu & Kashmir (J&K), Karnataka (KA) and Maharashtra (MH) have provided for the pay revisions in FY19 (please see Exhibit 67 on next page). Notably, Tamil Nadu (TN), which is known for its precarious financial situation, revised the pay and allowances of government employees and pension for pensioners with effect from October 1, 217. There has been a substantial increase in salaries and pension components in the Revised Estimates for 217-218 and the Budget Estimates for 218-219, owing to the implementation of the Seventh Pay Commission recommendations, Deputy Chief Minister, Mr Thiru O Panneerselvam, stated in his speech on March 15, 218. Exhibit 65: Annual change in aggregate salary & wages (S&W) spending budgeted by 2 states (% YoY) Aggregare salary bill of 2 states 26.4 29.8 17. 15.5 11.6 1.1 1.6 8.7 11. 14.4 16.6 FY9 FY11 Shaded regions represent periods of pay revisions Exhibit 66: Share of different states in salary and wages (S&W) expenditure in (% of total) UP, 14.7 PB, 3.1 WB, 6. TG, 3.1 TN, 7.4 RJ, 7. OR, 3.8 AP, 5. BH, CT, 2.9 2.3 GJ, 4.2 UK, 2. HR, 2.9 HP, 1.6 MH, 14.7 JK, 3.4 JH, 1.8 KA, 4.7 KL, 4.7 MP, 4.6 As % of aggregate S&W of 2 states Source: State Budgets, RBI, CEIC, MOSL Aggregate salary & wage bill for all states combined grew 14.4% in and budgeted to grow 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1 Not surprisingly then, the growth in aggregate salary & wage bill for all states combined was 14.4% in and budgeted at 16.6% in FY19, much lower than the average growth of 28% between FY9 and FY1 (Exhibit 65). This is despite the fact that almost all states (except West Bengal (WB) and Punjab (PB)) have provided for the pay revisions. Lower growth this time, however, can be attributed to the fact that states have amortized the pay commission awards over many years. Gujarat (GJ), for example, implemented in, but announced to pay arrears in March 218, May 218 and July 218. Similarly, Maharashtra (MH) has provided for only INR1b in FY19 and the arrears are to be paid in 3-4 installments over subsequent years. As exhibit 66 shows, MH alone accounts for ~15% of the total budget on salary & wages (S&W), similar to Uttar Pradesh (UP), followed by Tamil Nadu (7.4%) and Rajasthan (7%). April 218 42

Exhibit 67: State-wise details of Pay Commission awards States Commentary States not due to announce/yet to implement pay revisions - (A)* What do numbers say?# Andhra Pradesh (AP) Tenth Pay Commission implemented in 214-15. Next is due in 219 (4.1)~ 11.7 15.2 Punjab (PB) No announcement yet 8.5 15.2 2.5 Telangana (TG) Tenth Pay Commission implemented in 214-15. Next is due in 219 ~ 7.8 3.3 West Bengal (WB) Follows its own pay revisions time-table 7.9 12.4 7.9 States which implemented Seventh Pay Commission in 216-17 Gujarat (GJ) Implemented in 216-17 w.e.f. January 216. Arrears to be paid in 218 6.4 14.9 1. Haryana (HR) Implemented in 216-17 with effect from January 216 11.8 16.2 12.4 Himachal Pradesh (HP) Implemented in 216-17 9.1 16.9 17. Kerala (KL) Provisions for 1 th Pay Commission spread over two years 13.3 12.1 5. Uttar Pradesh (UP) Announced in December 216 and implemented in January 217. Arrears to be settled in two installments 14.3 1.6 2.2 Uttarakhand (UK) Announced in December 216 and implemented in January 217 12.8 17.2 22.8 States which made provisions for Seventh Pay Commission in 217-18 Bihar (BH) Implemented in May 217 with effect from April 217 4.2 2.8 11.1 Chhattisgarh (CT) Implemented in 217-18 7.7 34.8 6.8 Jharkhand (JH) Implemented in 217-18 with effect from January 216 8.5 33.2 11.3 Higher salaries to be paid in July 217 with effect from January 216. Madhya Pradesh (MP) Arrears to be paid in three installments; May every year beginning FY19 Implemented in September 217 w.e.f. January 216. Government to clear Odisha (OR) arrears partially in FY19 5.6 24.5 11.8 13.6 14.1 24.2 Rajasthan (RJ) Sufficient provisions made in 217-18 budget 15.9 33.1 22.5 Tamil Nadu (TN) Implemented on October 1 st 217 8. 12.6 15.5 States which made provisions for Seventh Pay Commission in 218-19 Jammu & Kashmir To be implemented from April 218 with effect from January 216 12.1 16.1 35.9 Karnataka (KA) Pay Commission expected to be implemented from July 1 st, 218 6.5 12.9 34.6 Maharashtra (MH) Implemented w.e.f. January 216. Arrears to be paid in 3-4 installments 6.5 16.3 22.5 Total (2 states) 1.1 14.4 16.6 # Change in salaries & wages spending bill for states Source: State Budgets, MOSL; * Average of the three years up to ~ Since AP was bifurcated in 214. Data is not comparable A look at the growth in S&W bill for individual states confirms that JK and KA have budgeted the highest growth of ~35% because of the pay revisions this year (Exhibit 68). Many other states such as OR, RJ and UP have also budgeted for high growth (of >2%) because the arrears are planned to be paid this year. MH has also budgeted for slower growth (than JK and KA) because it has not provided for the arrears in FY19. April 218 43

Exhibit 68: Budgeted growth in salary & wages by 2 states (% YoY) 35.9 34.6 16.6 15.2 11. 6.8 1. 12.4 17. 11.3 5. 11.8 22.5 24.2 2.5 22.5 15.5 3.3 2.2 22.8 7.9 All AP BH CT GJ HR HP JK JH KA KL MP MH OR PB RJ TN TG UP UK WB Source: State Budgets, RBI, CEIC, MOSL Salary & wages account for 22.2% of total spending by all states in FY19 and as much as ~27% of states revenue spending It is also interesting to note that salary & wages (excluding pensions) account for 22.2% of total spending by all states in FY19 (Exhibit 69) and as much as ~27% of states revenue spending. Among the 2 states, Uttar Pradesh (UP) has the highest share with S&W accounting for about one-third of total spending in FY19, while the lowest share (~12%) is for Bihar (BH). The share of salary & wages is also high at ~3% in Maharashtra (MH). Exhibit 69: Share of salary & wages in total spending (%) 3.3 3.4 3.8 32.5 11.9 12.8 16.5 16.7 17.1 17.9 19.3 19.8 2. 22.2 23.1 23.3 23.3 24.3 25. 26. 26. BH WB KA JH MP GJ AP CT HR All TG OR RJ UK TN PB KL MH HP JK UP Source: State Budgets, RBI, CEIC, MOSL April 218 44

PART III. What do the combined budgets tell us? Aggregate fiscal deficit of the general government in India is budgeted at 5.7% of GDP in FY19, lower than the revised estimate (RE) of 6.3% of GDP in FY18 (higher than of 5.8%). Notably, fiscal deficit of the general government was above 6% of GDP for more than 9% of the time post-liberalization. With states increasing reliance on market borrowings and the center reducing it, gross/net borrowings by states would be similar to the center in for the first time in the history of liberalized India. Governments are highly optimistic on the receipts front both the center and the states have budgeted record high tax-to-gdp ratio in FY19. Total taxes of the general government are budgeted to grow ~16% in FY19, better than ~15% growth in. India s tax-to-gdp ratio is budgeted to rise to an all-time high of 18.7% in FY19, primarily supported by higher indirect taxes, which are budgeted to grow 17% (~63% of all taxes). This confirms that the governments expect GST to boost tax receipts significantly. Total spending of the general government is budgeted to grow 11% in FY19, similar to that in. As % of GDP, however, total spending is budgeted to slow from 27.9% to 27.7% in FY19. Aggregate fiscal deficit budgeted at 5.7% of GDP for FY19 : With the central government budgeting a fiscal deficit of 3.3% of GDP in FY19, down from 3.5% in FY18, and the states budgeting 2.5%, the fiscal deficit of the general government is budgeted at 5.7% of GDP for FY19 (Exhibit 7-71). If so, this will be the third time in the past three decades that fiscal deficit will be below 6% of GDP. Notably, the aggregate deficit was revised upwards from BE of 5.8% of GDP to 6.3% of GDP in. Exhibit 7: Fiscal deficit of the center and the states since the 199s (% of GDP) 8 Center States Exhibit 71: Fiscal deficit of the general government since the 199s (% of GDP) 12 Fiscal deficit of general government 6 4 9 6 5.7 2 3 FY91 FY95 FY99 FY3 FY7 FY11 FY91 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL Although the aggregate fiscal deficit is budgeted to fall, market borrowings are budgeted to touch INR11t in FY19 but market borrowings set to rise further: Although the aggregate fiscal deficit is budgeted to fall (and remain broadly unchanged for the second consecutive year in absolute terms at INR1.6t), market borrowings of the general government are budgeted to touch INR11t (or 5.9% of GDP) in FY19. Due to higher repayments, net market borrowings of general government are budgeted to fall to 11-year lowest level of 4.5% of GDP in FY19 (Exhibit 72). April 218 45

Exhibit 72: Net market borrowings by the center and states (% of GDP) Net market loans (% of GDP) Centre States 1.7.4.5 1.4.5 1.1.5.4 3.2.4 1.9.5 2.7.5.5 1.4 2.1.6.6.6.7 1.1 1.7 3.8 3.5 3.3 3.7 3.8 3.1 1.1 1.4.4.3 1.1 2.6 2.6 2.6 1.8 4.1 6.2 1.1 4.2 1.5 1.5 1.5 1.7 5. 4.7 4.2 3.6 1.9 2.2 2.1 2.3 3.2 2.7 2.7 2.2 FY91 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL For FY19, the states are planning to finance as much as ~9% of their deficit via market borrowings, while the center has budgeted to borrow only about twothird of its deficit Interestingly, during the past couple of years, the states have tremendously increased their dependence on market borrowings, while the center has reduced it. For FY19, the states are planning to finance as much as ~9% of their deficit via market borrowings (Exhibit 73), while the center has budgeted to borrow only about two-third of its deficit. Not surprisingly then, states are budgeting to borrow similar to that of the center in FY19 for the first time in the history of liberalized India (Exhibit 74). Exhibit 73: States have increased their reliance on market borrowings, while the center has reduced it (% of GDP) 11 95 8 (% of FD) States Centre Exhibit 74: States market borrowings budgeted to match the center s for the first time in FY19 6, 4,5 3, (INRb) States Centre 65 1,5 5 FY9 FY11 FY91 FY95 FY99 FY3 FY7 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL While the center has budgeted a record high taxto-gdp ratio of 12.1%, the states have also budgeted for a new all-time high of 6.6% this year Governments are highly optimistic on receipts : The general government (center + states) has budgeted a growth of 16.1% in total taxes in FY19, better than ~15% growth in and the highest in six years (Exhibit 75). It implies that while the center has budgeted a record high tax-to-gdp ratio of 12.1%, beating the previous high of 11.9% in FY8, the states have also budgeted for a new all-time high of 6.6% this year (Exhibit 76). Consequently, the combined tax-to-gdp ratio is budgeted at 18.7%, better than 18% in and previous record of 17.6% in FY8. April 218 46

Exhibit 75: Total taxes of general government budgeted to grow ~16% in FY19 3 2 (% YoY) Total taxes Exhibit 76: Break-up of total taxes of general government (% of total taxes) States' indirect taxes, 3.8 Center's direct taxes, 32.8 1 FY91 FY95 FY99 FY3 FY7 FY11 Center's indirect taxes, 32. States' direct taxes, 4.4 Source: State Budgets, RBI, CEIC, MOSL Interestingly, a break-up of total taxes of the general government confirms that ~63% of total taxes are indirect taxes, with direct taxes still remaining under 4%. Of course, most of the direct taxes are collected by the center, while the indirect taxes are roughly divided equally between the states and the center (Exhibit 77). Exhibit 77: Tax-to-GDP of the general government (% of GDP) (% of GDP) Center States FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 1. 9.6 8.5 8.8 9.1 9.1 8.9 8. 8.5 8.7 7.9 8.5 9. 9.4 9.9 11. 11.9 1.8 9.6 1.2 1.2 1.4 1.1 1. 1.6 11.2 11.6 12.1 5.3 5.1 5.1 5.2 5. 4.8 5. 4.8 4.9 5.2 5.2 5.4 5.4 5.6 5.7 5.9 5.7 5.7 5.6 5.9 6.4 6.6 6.3 6.3 6.2 6. 6.4 6.6 Source: Union/State Budgets, RBI, CEIC, MOSL based primarily on GST: As we argued above, the information provided by states on GST collection is not sufficient to make credible conclusions. One of the key reasons making any analysis of GST complex and confusing is an attempt to understand GST through the narrow lens of the states or the center. To be sure, such analysis will create more confusion since the performance of GST must be analyzed from the broader lens of indirect taxes from an all-india perspective combined analysis of the center and the states. Nevertheless, since there is no detailed commodity-wise break-up of indirect taxes, to separate GST items from the GST-exempted products such as petroleum products, alcohol, etc, we have to analyse the performance of the entire indirect taxes. General government has pinned its hopes of collecting all-time high taxes in FY19, based on GST, which is a significant part of total indirect taxes Within total taxes, the general government has budgeted higher growth of ~17% in indirect taxes in FY19, higher than ~12% in (Exhibit 78). Direct taxes, however, are budgeted to grow slowly at 14.7% versus ~2% growth in the recently concluded year. It means that the general government has pinned its hopes of collecting all-time high taxes in FY19, based on GST, which is a significant part of April 218 47

total indirect taxes. The share of direct taxes in total taxes of the general government has fallen from a peak of ~42% in FY1 to ~37% in (Exhibit 79). As the theory goes, the more the direct tax collection, the more progressive the tax system is and the more developed the economy is. Exhibit 78: Indirect taxes are budgeted to grow faster than direct taxes in Exhibit 79: Share of direct taxes has fallen from its peak of ~42% of total taxes in FY1 to ~37% in 4 3 (% YoY) Direct taxes Indirect taxes Direct taxes Indirect taxes 2 1 24.8 31.9 42.1 38.8 37.2 FY9 FY1 FY11 FY12 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 Source: State Budgets, RBI, CEIC, MOSL Further, while the states own indirect taxes were much higher than the center s between FY1 and, as oil prices crashed, the economy started losing momentum, the center hiked indirect tax rates, while the states suffered (Exhibit 8). Consequently, the center s collection of indirect taxes in was 5.8% of GDP, higher than 5.2% by states, while it was similar in. For FY19, the center has budgeted higher indirect taxes of 6% of GDP, while states have budgeted 5.8% of GDP. Exhibit 8: States have budgeted record high indirect taxes in FY19 Center (gross) States' own 4.8 4.6 4.6 4.5 4.4 4.3 4.4 4.2 4.4 4.6 4.6 4.7 4.7 4.9 4.9 5. 4.9 4.9 4.9 5.1 5.5 5.7 5.5 5.5 5.4 5.2 5.6 5.8 7.8 7.5 6.3 6.4 6.5 6.5 6.5 5.5 5.7 5.6 5. 5.3 5.3 5.3 5.7 5.9 6. 5.1 4. 4.6 4.6 4.9 4.5 4.5 5.2 5.8 5.6 6. FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 Source: Union/State Budgets, RBI, CEIC, MOSL Although the general government has budgeted a record high tax collection, total spending is budgeted to moderate to 27.7% of GDP in FY19 Total spending, however, budgeted to grow slowly: Although the general government has budgeted a record high tax collection, total spending is budgeted at 27.7% of GDP in FY19, slightly lower than 27.9% in and lower than its peak of 3.5% in FY4 (Exhibit 81). April 218 48

Exhibit 81: Total spending of the general government (% of GDP) Total spending FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 29.5 28.2 27.9 28.1 26.6 26.1 27. 28. 27.9 28.3 28.5 29.4 3.5 28.4 26. 25.8 26.4 28.3 28.4 27.5 27.5 26.9 26.5 26.2 27.1 27.6 27.9 27.7 Source: Union/State Budgets, RBI, CEIC, MOSL The general government has budgeted a growth of 11% in total spending in FY19, similar to that in (Exhibit 82). Within total spending, both core revenue spending (revenue spending excluding interest payments) and capital spending are budgeted to grow ~11.5% in FY19 (Exhibit 83). Interestingly, capital spending of the general government declined in. Exhibit 82: Total spending of the general government budgeted to grow 11% in FY19 25 2 15 1 5 (% YoY) Total spending Exhibit 83: of which the core revenue spending is budgeted to grow slowly 4 3 2 1 (% YoY) Core revenue spending Capital spending FY91 FY95 FY99 FY3 FY7 FY11-1 FY9 FY11 Source: State Budgets, RBI, CEIC, MOSL Considering the fact, however, that general elections will be held in mid-219, spending pattern in FY19 is of added importance. Rather than total spending, core revenue spending in real terms is more important from the election perspective. Consequently, we deflate core revenue spending of the general government by the GFCE (government final consumption expenditure) deflator. Instead of analyzing only the center s budget, we decided to analyze spending patterns of the general government (center and states) because several states have their election schedules coinciding with general elections. As many as ten states AP, AR, CT, HR, MP, MH, OD, RJ, SK and TG accounting for ~4% of national GDP, will have elections in 219. We find that spending growth during the election year and the election results are highly linked Based on the past five elections held since the late 199s, we find that spending growth during the election year and the election results are highly linked (Exhibit 84). In FY99, real core revenue spending grew sharply at ~18% and the Vajpayee government retained power in 1999. In FY4, however, fiscal spending growth was April 218 49

only 4.4% and the NDA lost elections in 24. In FY9, core revenue spending grew again sharply at 2% and UPA was re-elected to power in 29 but lost in 214, when spending growth was only 1.5% in. Our analysis of FY19 budgets confirms that real core revenue spending is budgeted to grow 6.6%, slower than 8.5% average growth in the previous three years. Exhibit 84: Real core revenue spending of the general government (% YoY) 25 Real core revenue spending of GG 2 15 1 5 NDA retained power in 1999 NDA lost in 24 UPA retained power in 29 UPA lost in 214 Will history repeat in 219? FY97 FY99 FY1 FY3 FY5 FY7 FY9 FY11 Source: Union/State Budgets, RBI, CEIC, MOSL Our analysis of FY19 budgets confirms that real core revenue spending is budgeted to grow 6.6%, slower than 8.5% average growth in the previous three years Finally, we present sector-wise spending of the center and states. Obviously, the emphasis of the center and the states are very different. While about a quarter of the center s total spending is taken up by interest payments, subsidies and defense take up almost another quarter of total spending (Exhibit 85). On the other hand, while interest payments take only ~1% of total spending by states, rural sector (sum of agriculture & allied activities, rural development, and irrigation & flood control) and education consume almost another one-third of states total spending (Exhibit 86). As we had discussed in Part I of the report, growth in rural spending is also nothing extraordinary in FY19. Exhibit 85: Where does the center spend? Exhibit 86: Where do the states spend? Rural sector, 7.1, 34. Defense, 1.9 Pensions, 6.9 Interest payments, 23.6 Transport, 5.5 Subsidies, 12.1 Pension, 9.2, 36.6 Education etc, 15.5 Transport, 4.7 Interest payments, 9.8 Rural sector, 17.2 Housing, 1.8 Energy, 5.3 Source: State Budgets, RBI, CEIC, MOSL April 218 5

Appendix All states* Population: 1,275m Nominal GSDP in FY19: INR 187.2t Fiscal deficit in FY19 at 2.5% of GSDP Total liabilities in FY19 at 25.3% of GSDP INR b % YoY Total receipts 2,72.5 25,597.9 25,333. 28,769.8 11.9 22.3 13.6 Revenue receipts 2,551.8 25,122.3 24,782.5 28,193.2 11.5 2.6 13.8 Total taxes 15,8.2 17,636.5 17,378.9 19,982.1 12.2 15.2 15. States' own taxes 9,124.2 11,22.8 1,744.6 12,367.8 7.7 17.8 15.1 SGST 2,84.6 5,294.5 88.8 Share in central taxes 5,956. 6,613.7 6,634.3 7,614.3 19.9 11.4 14.8 Non-tax revenue receipts: State 1,681. 1,92. 1,919.5 2,219. 9. 14.2 15.6 Grants from the Centre 3,79.6 5,565.8 5,484.1 5,992.1 1. 44.7 9.3 Non-debt capital receipts 168.8 475.6 55.5 576.6 82.7 226.2 4.7 Total spending 26,19.4 29,956.5 29,989.5 33,44.4 14.6 14.9 11.4 Revenue spending 2,973.7 24,97. 25,3.9 27,796.8 13.5 19.2 11.2 Education, sports, art & culture 3,857.6 4,48. 4,274.6 4,965.9 1.1 1.8 16.2 Agriculture & allied activities 1,233.6 1,835.7 1,958.4 2,3.8 13.8 58.8 2.3 Rural development 1,249.9 1,434.8 1,427. 1,589. 16.1 14.2 11.4 Interest payments 2,519.4 2,95. 2,932.7 3,257.4 17.1 16.4 11.1 Pensions 2,216.3 2,796.5 2,767.4 3,72.3 9.7 24.9 11. Police 99. 1,132.1 1,131.7 1,267.9 1.9 14.3 12. Capital spending 5,135.7 5,49.5 4,985.6 5,67.6 19.4-2.9 12.5 Water supply & sanitation 221.5 312.7 34.2 33.8 17.1 37.4 8.7 Agriculture 171.2 162.4 154.7 184.1 34. -9.6 19. Rural development 253.1 387.8 363.9 46.9-3. -6.1 26.6 Irrigation & flood control 842.3 1,24.7 927.7 1,12.6 21.8 1.1 2.8 Energy 566.3 463.5 56.9 483.8 14.1-1.5-4.6 Transport 953.3 1,7.5 1,56.4 1,77.1 2. 1.8 2. Fiscal deficit 5,388.8 4,358.6 4,656.5 4,634.6 26.6-13.6 -.5 % of GDP 3.5 2.6 2.8 2.5 Revenue deficit 421.9-215.3 221.4-396.4 765.6-47.5-279.1 % of GDP.3 -.1.1 -.2 Primary deficit 2,869.4 1,453.6 1,723.8 1,377.3 36.2-39.9-2.1 % of GDP 1.9.9 1..7 Gross market borrowings 3,911.7 4,753.2 4,552.9 5,45.1 38.2 16.4 19.7 % of GDP 2.6 2.8 2.7 2.9 Net market borrowings 3,375. 4,2. 3,794.2 4,215.7 38.2 12.4 11.1 % of GDP 2.2 2.4 2.3 2.3 Outstanding debt 37,792.4 42,254.6 42,294.9 47,311.8 18. 11.9 11.9 % of GDP 24.8 25.1 25.2 25.3 GSDP (at current prices) 152,537.1 168,474.6 167,516.9 187,149.2 1.8 9.8 11.7 * Data for all states derived from our analysis of 2 states, MOSL April 218 51

Exhibit 87: Break-up of total revenue receipts (% of GDP) Exhibit 88: Further details of tax receipts (% of total taxes) (% of GDP) Taxes Non-tax revenue Share in Property & central Capital taxes Transaction 4.4 3.1 3. 3.8 3.6 3.6 4.4 4.4 38% 7% 9.5 9.2 9. 9.8 9.9 1.5 1.4 1.7 4% Excise 7% SGST 27% Sales, trade etc 17% Exhibit 89: Change in key budget items (% YoY) 5 4 3 2 1 (1) Rev receipts Rev spending Cap spending Exhibit 9: Share of SPI in revenue spending (% of total spending) 3.7 3.2 28.1 27.1 26.5 26.2 25.4 26.7 (% YoY) 12.2 12.2 11.6 11.6 12. 11.7 11.7 11.7 11.8 Interest payments Pension Salary & wages 11.8 11.2 1.9 1.6 11.2 11.1 11.1 (% of total spending) Exhibit 91: Key details of revenue spending by department Exhibit 92: Key details of capital spending by department (% of total) 42% Pension 11% Education etc 18% Interest 12% Social Security & welfare 4% Agriculture 7% Rural devt 6% (% of total) Transport 21% Energy 9% 34% Irrigation & flood control 21% Sanitation 6% Rural devt 9% Exhibit 93: Fiscal deficit and revenue balance (% of GDP) (% of GDP) 2..2 2.2 2.6 (.1) Fiscal deficit (.4) 3.1 (.) Revenue Balance 3.5 (.3) 2.6.1 2.8 (.1) 2.5.2 Exhibit 94: Debt to GDP ratio (% of GDP) 25.3 25.2 25.1 24.8 23.3 21.7 22. 22.2 April 218 52

Andhra Pradesh Population: 5.2m (4% of India s population) Nominal GSDP in FY19: INR 8.7tn (4.7% of India s nominal GDP) Fiscal deficit in FY19 at 2.8% of GSDP Total liabilities in FY19 at 28.7% of GSDP INR b % YoY Total receipts 1,1.1 1,259.4 1,236.9 1,56.1 13.6 22.5 26.1 Revenue receipts 989.8 1,255. 1,232.5 1,555.1 11.7 24.5 26.2 Total taxes 74.5 828.6 817.2 994.6 14. 16. 21.7 States' own taxes 441.8 537.2 527.2 655.4 1.7 19.3 24.3 SGST. 54.3 94.9 74.9 Share in central taxes 262.6 291.4 29. 339.3 2. 1.4 17. Non-tax revenue receipts: State 51.9 5.9 39.9 53.5 5.5-23.2 34. Grants from the Centre 233.5 375.5 375.5 57. 6.5 6.8 35. Non-debt capital receipts 2.3 4.4 4.4 5. 613. -78.3 13.6 Total spending 1,319.2 1,489.9 1,513. 1,82.1 19.1 14.7 19.1 Revenue spending 1,161.8 1,259.1 1,272.7 1,52.7 21.1 9.5 18.1 Education, sports, art & culture 172.1 213.6 22.2 258.4 3.7 17.5 27.8 Agriculture & allied activities 79.1 5.4 58.7 78. 6.6-25.7 32.9 Rural development 98. 117.1 79.6 15.1 18.7-18.8 32.1 Interest payments 117. 147.8 147.6 15.8 18.8 26.1 2.2 Pensions 128.7 139.1 143.9 152.2 14.4 11.8 5.8 Police 41.7 45.9 47.5 52. 15.5 13.9 9.7 Capital spending 157.4 23.8 24.3 299.4 6.1 52.6 24.6 Water supply & sanitation 5.3 5.4 4.6 7.8 789. -13. 69.4 Agriculture 1.5 3. 2.3 6.1 73.3 47.7 171.5 Rural development. 12.1 8.8 15.6 - -27.4 77.4 Irrigation & flood control 1. 12.6 147.9 159.2 12.1 47.9 7.6 Energy..1.2.2-83.9 641.5-9.1 Transport 21. 2.2 17.8 21.9-14.3-15. 22.8 Fiscal deficit 39.1 23.5 276. 242.1 % of GDP 4.4 2.9 3.5 2.8 Revenue deficit 171.9 4.2 4.2-52.4 % of GDP 2.5.1.5 -.6 Primary deficit 192.1 82.7 128.5 91.3 % of GDP 2.7 1.1 1.6 1. Gross market borrowings 27.8 268.2 258. 296.1 8.4 24.1 14.7 % of GDP 3. 3.4 3.3 3.4 Net market borrowings 177. 229.4 219.2 232.3 8.4 23.8 6. % of GDP 2.5 2.9 2.8 2.7 Outstanding debt 2,13.1 2,16.3 2,252.3 2,494.4 15.8 11.9 1.7 % of GDP 28.8 27.6 28.4 28.7 GSDP (at current prices) 6,992.5 7,827.1 7,93.8 8,73.3 14.6 13.4 9.7, MOSL April 218 53

Exhibit 95: Break-up of total revenue receipts (% of GDP) 1.6 1.1 11. 1.1 1.1 1.6 1.3 11.4 Exhibit 96: Further details of tax receipts (% of total taxes) Share of Taxes Non-tax revenue central (% of GDP) Property & 6.2 6.4 taxes Capital 5.4 3.1 2.9 4.4 4.1 5.2 35% Transaction 1% 6% Excise 7% Vehicles 4% Sales, trade etc 47% Exhibit 97: Change in key budget items (% YoY) 75 5 25 (25) (5) Rev. receipts Rev. spending Cap. spending Exhibit 98: Share of SPI in revenue spending (% of total spending) 27.3 27.7 23.9 23.2 26. 19.9 23.7 23.1 11.8 12.4 8.7 11.7 11.1 11. 11.3 1.1 (% YoY) 11.4 11.7 8.7 1.3 1.1 11.7 11.6 1. Interest payments Pension Salary & wages (% of total spending) Exhibit 99: Key details of revenue spending by department (% of total) 56% Pension 1% Education etc 17% Interest 1% Rural devt 7% Exhibit 1: Key details of capital spending by department (% of total) Irrigation & flood control 56% Transport 8% 28% Urban devt 3% Rural devt 5% Exhibit 11: Fiscal deficit and revenue balance (% of GDP) Exhibit 12: Debt to GDP ratio (% of GDP) 1.8 1.7.1. Fiscal deficit 5.8 3.6 4.4 Revenue balance 2.9 3.5 2.8.6 28.7 28.4 27.6 28.8 (4.6) (1.2) (2.5) (.1) (.5) 22.2 22.3 28.5 28.3 (% of GDP) April 218 54

Bihar Population: 11.1m (8.7% of India s population) Nominal GSDP in FY19: INR 5.2t (2.8% of India s nominal GDP) Fiscal deficit in FY19 at 2.2% of GSDP Total liabilities in FY19 at 26.7% of GSDP INR b % YoY Total receipts 1,56.1 1,371.8 1,331.3 1,584.6 9.8 26.1 19. Revenue receipts 1,55.8 1,371.6 1,331.1 1,58.5 9.8 26.1 18.7 Total taxes 826.2 973.3 97.8 1,71.7 11.1 17.5 1.4 States' own taxes 237.4 32. 32. 31. -6.7 34.8-3.1 SGST 15. - Share in central taxes 588.8 653.3 65.8 761.7 2.4 1.5 17. Non-tax revenue receipts: State 24. 28.7 28.6 44.5 1. 18.8 55.7 Grants from the Centre 25.6 369.6 331.7 464.3 5.1 61.3 4. Non-debt capital receipts.2.2.2 4.1 26. -22.8 2,169.4 Total spending 1,22.9 1,552.9 1,68.9 1,696.6 12.8 37.7.9 Revenue spending 947.7 1,226. 1,316.6 1,367.4 13.3 38.9 3.9 Education, sports, art & culture 191.5 247. 245.2 322.5 2.9 28. 31.5 Agriculture & allied activities 22.9 4.7 53.5 49.3-34.9 133.8-7.7 Rural development 83.5 121.2 129.1 142.8 69.7 54.6 1.5 Interest payments 81.9 95.9 95.9 17.6 15.4 17.1 12.2 Pensions 125.1 198.8 198.8 158.3 5.5 58.9-2.4 Police 53.4 62.9 63.2 72. 9.9 18.3 13.9 Capital spending 273.2 326.9 364.3 329.2 11.1 33.3-9.6 Water supply & sanitation 11.6 18.1 18.1 21.3 5.5 55.5 17.5 Agriculture 1.3 3.1 3.8 2.4-78.9 195.4-36. Rural development 78.9 88.9 93.3 98. -1.5 4.9 5. Irrigation & flood control 18. 31. 28.9 26.1 6.6 61.1-9.8 Energy 57.4 54.8 69.6 54.2 15.4 21.3-22. Transport 56. 55.3 59.2 55.4 26.8 5.8-6.5 Fiscal deficit 164.8 181.1 349.6 112. % of GDP 3. 2.9 7.5 2.2 Revenue deficit -18.2-145.6-14.5-213.1 % of GDP -2. -2.3 -.3-4.1 Primary deficit 82.9 85.2 253.7 4.4 % of GDP 1.5 1.3 5.4.1 Gross market borrowings 177. 195. 166.7 183.4 53.9-5.8 1. % of GDP 3.3 3.1 3.6 3.6 Net market borrowings 168. 184. 155.8 149.5 53.9-7.3-4.1 % of GDP 3.1 2.9 3.3 2.9 Outstanding debt 1,61.7 1,25.7 1,224.2 1,378.8 19.5 15.3 12.6 % of GDP 19.6 19.8 26.3 26.7 GSDP (at current prices) 5,45.6 6,321.8 4,663.7 5,156.3 1.9-13.7 1.6 April 218 55

Exhibit 13: Break-up of total revenue receipts (% of GDP) Exhibit 14: Further details of tax receipts (% of total taxes) (% of GDP) 3.9 4.1 5.1 4.5 4.2 6.3 16.4 16. 14.3 15.3 15.3 15.4 Taxes Non-tax revenue 7.7 9.9 2.8 2.8 Share in central taxes 71% 2% Property & Capital Transaction 5% Sales, trade etc 8% SGST 14% Exhibit 15: Change in key budget items (% YoY) Exhibit 16: Share of SPI in revenue spending 4 3 2 1 (1) (2) Rev receipts Rev spending Cap spending (% YoY) Interest payments Pension Salary & wages (% of total spending) 23.6 21.3 19.2 17. 15.9 14.7 13.9 14.8 15.4 15.2 15.6 14.2 13.2 16.2 15.1 11.6 8.1 8.7 8.4 8.5 8.6 7.8 7.3 7.9 Exhibit 17: Key details of revenue spending by department Exhibit 18: Key details of capital spending by department (% of total) Education etc 24% 28% Rural devt 3% 46% Rural devt 1% Interest 8% Pension 12% Transport 17% Energy 17% Irrigation & flood control 8% Exhibit 19: Fiscal deficit and revenue balance (% of GDP) Fiscal deficit Revenue balance 7.5 4.1 2.2 2.4 2.8 3. 2.6 2.9 1.7 1.9 2. 2.3 2.2 1.5 2.5.3 Exhibit 11: Debt to GDP ratio (% of GDP) (% of GDP) 19.8 19.6 18.2 18.5 18.7 19.5 26.7 26.3 April 218 56

Chhattisgarh Population: ~27.1m (2.1% of India s population) Nominal GSDP in FY19: INR 3.3t (~1.7% of India s nominal GDP) Fiscal deficit in FY19 at 3.1% of GSDP Total liabilities in FY19 at 18.1% of GSDP INR b % YoY Total receipts 538.6 663.8 688.9 731.8 16.2 27.9 6.2 Revenue receipts 536.9 66.9 685.8 728.7 16.5 27.7 6.3 Total taxes 377.5 442.9 457.2 489.8 15.1 21.1 7.1 States' own taxes 189.5 234.2 244.4 26.3 11. 29. 6.5 SGST. 74.5 121.5 63. Share in central taxes 188.1 28.7 212.8 229.5 19.7 13.1 7.9 Non-tax revenue receipts: State 56.7 77. 77.2 81.7 8.7 36.1 5.9 Grants from the Centre 12.6 141. 151.5 157.1 27.3 47.6 3.7 Non-debt capital receipts 1.8 2.9 3.1 3.1-41.4 73.6 3. Total spending 579.7 76.3 786.2 831.8 11.9 35.6 5.8 Revenue spending 481.6 613.1 653.9 684.2 1.2 35.8 4.6 Education, sports, art & culture 11.8 137.6 137.9 143.9 18.8 24.5 4.3 Agriculture & allied activities 67.7 89.3 11.3 114.1-18.7 63. 3.4 Rural development 43. 35. 37.4 38.3 44.9-13.1 2.4 Interest payments 26.9 3.4 32.8 38.5 25. 22. 17.4 Pensions 34.9 52.1 4.5 53.6 -.9 16.2 32.3 Police 27.5 36.7 4.2 42.2 8.7 46.3 5. Capital spending 98. 147.2 132.3 147.6 2.9 35. 11.5 Water supply & sanitation 3.3 4.8 5.3 5.3 132.4 58. -.2 Agriculture.9 1.5 1.6 1.7 45.6 69.8 9.8 Rural development 3.7 6.4 6.7 6.4-49.2 5. -4.4 Irrigation & flood control 18.9 25.7 21. 26.9 8.7 11.3 28. Energy 9.1 5.8 8.9 6.5 598. -2. -26.7 Transport 34.2 62.5 45.9 52.1 11.5 34.1 13.5 Fiscal deficit 41.1 96.5 97.4 1. % of GDP 1.6 3.5 3.3 3.1 Revenue deficit -55.2-47.8-31.9-44.5 % of GDP -2.1-1.7-1.1-1.4 Primary deficit 14.2 66. 64.6 61.5 % of GDP.5 2.4 2.2 1.9 Gross market borrowings 42. 78. 81. 81.9-13.4 92.9 1.1 % of GDP 1.6 2.8 2.8 2.5 Net market borrowings 39. 78. 81. 81.9-13.4 17.8 1.1 % of GDP 1.5 2.8 2.8 2.5 Outstanding debt 433.2 51.5 53.6 588.1 14.7 22.5 1.8 % of GDP 16.6 18.5 18.2 18.1 GSDP (at current prices) 2,616.1 2,764.1 2,915.5 3,256.4.4 11.4 11.7 April 218 57

Exhibit 111: Break-up of total revenue receipts (% of GDP) Exhibit 112: Further details of tax receipts (% of total taxes) Taxes Non-tax revenue (% of GDP) 7.9 7.8 6.1 7.3 5.6 5.3 6.2 5.1 (% of total taxes) Share in central taxes 47% Property & Capital Transaction 5% 12.3 11.9 1.8 12.6 14.4 16. 15.7 15. 14% Excise 9% SGST 25% Exhibit 113: Change in key budget items (% YoY) 5 Rev receipts Rev spending Cap spending (% YoY) Exhibit 114: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 25 32.1 27.8 25.3 24.9 23.7 25. 23.5 24. (25) 8.9 8.4 8.2 8.1 7.2 8.5 6.2 7.8 4.3 4.1 4.2 4.9 5.6 5. 5. 5.6 Exhibit 115: Key details of revenue spending by department (% of total) Education etc 21% Exhibit 116: Key details of capital spending by department (% of total) 3% 49% Pension 8% Interest 5% Agriculture 17% Transport 36% Irrigation & flood control 19% Education 7% Urban devt 8% Exhibit 117: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 3.6 3.5 3.3 3.1 2.7 2.1 1.6 1.6 1.6 1.7 1.4 2.1.9 1.1 (.4) (.7) Exhibit 118: Debt to GDP ratio 18.1 18.2 18.5 16.6 14.5 14. 14.1 13. (% of GDP) April 218 58

Gujarat Population: ~63.4m (5% of India s population) Nominal GSDP in FY19: INR 15.tn (~7.9% of India s nominal GDP) Fiscal deficit in FY19 at 1.7% of GSDP Total liabilities in FY19 at 16.% of GSDP. INR b % YoY Total receipts 1,12.5 1,318.2 1,319.6 1,49.3 12.9 19.7 6.8 Revenue receipts 1,98.4 1,315.2 1,315.5 1,46.3 12.7 19.8 6.9 Total taxes 832.8 974.5 987.5 1,13.4 6.3 18.6 14.5 States' own taxes 644.4 765.5 779.7 887.3 2.8 21. 13.8 SGST. 25. 427.5 71. Share in central taxes 188.4 29. 27.8 243.1 2.1 1.3 17. Non-tax revenue receipts: State 133.5 184. 17. 117.1 3.9 27.3-31.1 Grants from the Centre 132.2 156.7 158.1 158.9 47.7 19.6.5 Non-debt capital receipts 4.1 3. 4.1 3. 223.5 1.3-28. Total spending 1,267.3 1,55.3 1,539.1 1,665.1 5.1 21.4 8.2 Revenue spending 1,38.9 1,254.6 1,255.7 1,346.3 8.5 2.9 7.2 Education, sports, art & culture 185.6 22.7 222.4 223.8 3.2 19.8.6 Agriculture & allied activities 5.4 62.6 81.4 67.6 16.7 61.6-17. Rural development 34.2 33.5 37.1 39.6 1.7 8.5 6.7 Interest payments 178. 193.4 19.6 21.8 9.2 7.1 5.9 Pensions 113. 134.8 135.5 147.7 13.5 19.9 9. Police 34.9 39.6 45.8 42.2 1.6 31. -7.9 Capital spending 228.3 295.8 283.4 318.8-8.1 24.1 12.5 Water supply & sanitation 25. 28.7 31.6 31.1 37.6 26.2-1.7 Agriculture 8.1 11.7 8.9 11.3-14.7 1.6 26.4 Rural development 11.8 12.1 12.1 12.2-1.8 -.2.6 Irrigation & flood control 74.2 94. 94.3 99.4-8.8 27.1 5.4 Energy 26.9 31. 29.4 28.9-18.6 9.5-1.7 Transport 29.4 4.7 4.5 43.4 7.1 38. 7.1 Fiscal deficit 164.8 232.2 219.5 255.8 % of GDP 1.4 1.8 1.7 1.7 Revenue deficit -59.5-6.7-59.8-6. % of GDP -.5 -.5 -.5 -.4 Primary deficit -13.2 38.8 28.9 54. % of GDP -.1.3.2.4 Gross market borrowings 247.2 3. 28. 33. 52. 13.3 17.9 % of GDP 2.1 2.4 2.1 2.2 Net market borrowings 29.4 217.8 197.8 234.7 52. -5.5 18.6 % of GDP 1.8 1.7 1.5 1.6 Outstanding debt 1,993.4 2,146.9 2,173.4 2,387. 1.3 9. 9.8 % of GDP 17.2 16.8 16.5 16. GSDP (at current prices) 11,581.5 12,755.9 13,21.7 14,96.1 13. 14. 13.3 April 218 59

Exhibit 119: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 1.7 1.7 2.2 1.9 2.7 2.3 2.5 1.8 Exhibit 12: Further details of tax receipts (% of total taxes) (% of total taxes) 12% Share in central taxes 22% Property & Capital Transaction 1% 8.7 8.2 7.8 7.6 7.2 7.6 7.5 7.6 SGST 38% Sales, trade etc 18% Exhibit 121: Change in key budget items (% YoY) Rev receipts Rev spending Cap spending 6 (% YoY) 45 3 Exhibit 122: Share of SPI in revenue spending (% of total spending) 26.8 Interest payments Pension Salary & wages 25.9 24.2 23. 22.6 (% of total spending) 21. 21.5 22.1 15 1.3 11. 1.6 1.4 1.9 1.7 1.8 11. (15) 17.5 17.7 17.2 17. 17.1 15.4 15.2 15. Exhibit 123: Key details of revenue spending by department Exhibit 124: Key details of capital spending by department (% of total) 52% Education etc 17% Interest 15% Agriculture 5% (% of total) Transport 14% 39% Rural devt 4% Pension 11% Energy 1% Irrigation & flood control 33% Exhibit 125: Fiscal deficit and revenue balance (% of GDP) Exhibit 126: Debt to GDP ratio (% of GDP) Fiscal deficit 2.2 2.3 2.1 2.2.8.6.6.2 Revenue balance 1.8 1.7 1.7 1.4.5.5.5.4 16. 16.5 16.8 17.2 17.6 17.7 (% of GDP) 18.5 18.8 April 218 6

Haryana Population: ~26.7m (2.1% of India s population) Nominal GSDP in FY19: INR 6.9t (~3.6% of India s nominal GDP) Fiscal deficit in FY19 at 2.8% of GSDP Total liabilities in FY19 at 23.4% of GSDP INR b % YoY Total receipts 535. 748.1 764.5 833.3 9.1 42.9 9. Revenue receipts 525. 688.1 7.9 769.3 7.9 33.5 9.8 Total taxes 46.2 517.1 53.6 584.3 8.2 3.6 1.1 States' own taxes 34.3 433.4 446.9 491.3 1. 31.3 9.9 SGST. 125.2 237.6 - - 89.8 Share in central taxes 66. 83.7 83.7 93.. 26.9 11.1 Non-tax revenue receipts: State 62. 1.8 19.8 113. 3.4 77.3 2.9 Grants from the Centre 56.8 7.2 6.4 72. -11. 6.4 19.2 Non-debt capital receipts 1. 6. 63.6 64. 179. 536.3.6 Total spending 797.8 923.8 936.9 1,27.3.5 17.4 9.7 Revenue spending 684. 799.4 783.1 851.9 15.5 14.5 8.8 Education, sports, art & culture 11.6 143.5 128.5 144.6 11.5 16.2 12.5 Agriculture & allied activities 25.2 37.7 31.5 45.5 9.8 24.9 44.7 Rural development 28.9 37.9 34.8 42.3 56.3 2.2 21.8 Interest payments 15.4 112.6 118.9 14.4 27.3 12.8 18.1 Pensions 56.6 66. 84. 83. 4.5 48.4-1.2 Police 32.1 38.4 37.9 42.8 17.5 18. 12.8 Capital spending 113.8 124.5 153.7 175.5-43.6 35.1 14.1 Water supply & sanitation 9.4 14.4 13.5 17.6 12.7 43. 3.6 Agriculture 4.1-1.6.9 1.1 3. -77.5 14.4 Rural development. 12.. 1. - - - Irrigation & flood control 9.3 8.3 7.9 16.1 5.7-14.2 12.3 Energy 18.9 15.3 56. 54.9 18.6 195.6-2. Transport 15.9 22. 2.6 22.7-21. 3. 1.2 Fiscal deficit 262.9 175.7 172.4 194. % of GDP 4.8 2.8 2.8 2.8 Revenue deficit 159.1 111.2 82.3 82.5 % of GDP 2.9 1.8 1.4 1.2 Primary deficit 157.4 63.1 53.5 53.6 % of GDP 2.9 1..9.8 Gross market borrowings 158. 164.2 185.4 223.3 12.1 17.3 2.4 % of GDP 2.9 2.7 3. 3.2 Net market borrowings 153.6 156.2 177.4 19.3 12.1 15.5 7.3 % of GDP 2.8 2.5 2.9 2.8 Outstanding debt 1,246. 1,418.5 1,417.9 1,611.6 22.5 13.8 13.7 % of GDP 22.8 22.9 23.3 23.4 GSDP (at current prices) 5,453.2 6,185.6 6,84.7 6,875.7 12.2 11.6 13. April 218 61

Exhibit 127: Break-up of total revenue receipts (% of GDP) Taxes Non-tax revenue (% of GDP) 2.8 2.8 2.7 2. 2.3 2.2 2.3 2.2 7.7 7.2 7.1 7.7 7.4 8.4 8.7 8.5 Exhibit 128: Further details of tax receipts (% of total taxes) Excise 1% 13% Share in central taxes 16% Sales, trade etc 2% SGST 41% Exhibit 129: Change in key budget items (% YoY) Rev receipts Rev spending Cap spending 375 (% YoY) 25 125 (125) Exhibit 13: Share of SPI in revenue spending (% of total spending) 27.9 27. 27.1 23.6 23.1 25.1 23.4 24.2 9.5 1. 9.4 9.1 8.3 8.3 1.7 9.7 12.5 14. 14.1 14. 15.4 14.1 15.2 16.5 Interest payments Pension Salary & wages (% of total spending) Exhibit 131: Key details of revenue spending by department (% of total) 49% Education etc 17% Energy 8% Exhibit 132: Key details of capital spending by department (% of total) Transport 14% 3% Sanitation 11% Pension 1% Interest 16% Energy 35% Irrigation & flood control 1% Exhibit 133: Fiscal deficit and revenue balance (% of GDP) Exhibit 134: Debt to GDP ratio (% of GDP) 3. 2.1 Fiscal deficit 2.9 6.3 4.8 Revenue balance 2.8 2.8 2.8 23.4 23.3 22.9 22.8 2.9 (1.3) (1.) (1.9) (2.2) (2.9) (1.8) (1.4) (1.2) 15.1 14.6 16.2 (% of GDP) April 218 62

Himachal Pradesh Population: ~7.1m (~.6% of India s population) Nominal GSDP in FY19: INR 1.5t (~.8% of India s nominal GDP) Fiscal deficit in FY19 at 4.9% of GSDP Total liabilities in FY19 at 31.8% of GSDP INR b % YoY Total receipts 262.9 277.3 28.7 34.3 12. 6.8 8.4 Revenue receipts 262.6 277.1 28.2 34. 12. 6.7 8.5 Total taxes 113.8 127.6 121.8 146.3 1.4 7. 2.2 States' own taxes 7.4 79.5 73.8 82.5 5.1 4.8 11.8 SGST. 2.7 4.6 - - 96.8 Share in central taxes 43.4 48.2 48. 63.9 2.4 1.5 33. Non-tax revenue receipts: State 17.2 16. 21.4 19.8-6.5 24.7-7.5 Grants from the Centre 131.6 133.5 137. 137.8 16.5 4.1.6 Non-debt capital receipts.3.2.5.3 13.9 73.6-32.5 Total spending 289. 322.9 348.1 378.7 12.7 2.5 8.8 Revenue spending 253.4 287.6 36.5 335.7 13.6 2.9 9.5 Education, sports, art & culture 49.5 62. 65.5 69.7 19.7 32.4 6.5 Agriculture & allied activities 16.8 2.4 21.6 24.1 8. 28.6 11.6 Rural development 11.8 15.3 14.8 17.9 17.3 25.9 2.3 Interest payments 33.6 35. 38.2 42.6 6.5 13.7 11.6 Pensions 41.1 49.5 49.5 58.9 7.2 2.3 19. Police 9.7 1.5 11.3 12.5 3.4 16.5 1.3 Capital spending 35.5 35.3 41.6 43. 6.7 17. 3.4 Water supply & sanitation 3.9 3.5 4.3 3.6 23.5 1.4-17.4 Agriculture 1. 1.1 1.1 1.5-4.2 8.7 29.2 Rural development....2 - - - Irrigation & flood control 2. 4.2 4.3 5.3 41.6 111.6 23.3 Energy 2. 2.5 2.6 2.5-23.5 25.8-2. Transport 15.8 16.1 18. 18.4 19.3 13.6 2.4 Fiscal deficit 26. 45.5 67.3 74.3 % of GDP 2.1 3.2 4.9 4.9 Revenue deficit -9.2 1.4 26.3 31.7 % of GDP -.7.7 1.9 2.1 Primary deficit -7.6 1.5 29.2 31.7 % of GDP -.6.7 2.1 2.1 Gross market borrowings 34. 55.8 55.8 58.9 38.8 64.3 5.5 % of GDP 2.7 3.9 4.1 3.9 Net market borrowings 21.6 35.4 35.4 37.9 38.8 63.5 7.1 % of GDP 1.7 2.5 2.6 2.5 Outstanding debt 419.9 431.1 448.7 481.9 1.1 9.8-1. % of GDP 33.5 3.2 33. 31.8 GSDP (at current prices) 1,242.4 1,426.5 1,361.4 1,515.6 9.6 9.6 11.3 April 218 63

Exhibit 135: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 11.8 9.8 8.9 11.6 12. 1.5 11.6 1.4 9.4 9.2 8.3 9.1 9.2 8.9 8.9 9.7 Exhibit 136: Further details of tax receipts (% of total taxes) Share in central taxes 43% Property & Capital Transaction 2% SGST 28% 17% Excise 1% Exhibit 137: Change in key budget items (% YoY) 45 Rev receipts Rev spending Cap spending 3 15 Exhibit 138: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 38.9 37.3 36.2 31.5 33.2 34.2 32.1 34.3 (15) (% YoY) 17. 16.5 14.7 17.2 16.2 17.2 16.1 17.6 14.7 14.3 14.4 14.1 13.3 12.2 12.5 12.7 Exhibit 139: Key details of revenue spending by department Exhibit 14: Key details of capital spending by department (% of total) 42% Pension 17% Education etc 21% Agriculture 7% Interest 13% (% of total) Transport 44% 38% Irrigation & flood control 12% Energy 6% Exhibit 141: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 4.9 4.2 4.2 3.4 3.2 4.9 1.9 2.1 1..7 (.8) (.7) (2.) (1.9) (1.9) (2.1) Exhibit 142: Debt to GDP ratio 31.8 (% of GDP) 33. 33.5 33.1 33.9 33.2 34.7 April 218 64

Jammu & Kashmir Population: ~13.2m (~1% of India s population) Nominal GSDP in FY19: INR 1.6t (~.8% of India s nominal GDP) Fiscal deficit in FY19 at 5.4% of GSDP Total liabilities in FY19 at 44.7% of GSDP INR b % YoY Total receipts 426. 634.5 61.7 691.4 14.5 41.2 14.9 Revenue receipts 419.8 58.7 553.1 642.7 17.3 31.8 16.2 Total taxes 173.1 196.4 219.4 241.8 14.3 26.8 1.2 States' own taxes 78.2 99.3 11.4 111.9 6.7 29.6 1.4 SGST. 36.8 7.6 - - 91.8 Share in central taxes 94.9 97.1 118. 129.8 21.5 24.4 1. Non-tax revenue receipts: State 4.7 53.1 53.9 57.6 4.1 32.3 6.9 Grants from the Centre 26. 331.2 279.8 343.3 4.1 35.8 22.7 Non-debt capital receipts 6.2 53.8 48.6 48.7 23.1 678.8.2 Total spending 481.7 763.3 665.8 775.9 9.9 38.2 16.5 Revenue spending 398.1 488.2 438.8 511.9 9.3 1.2 16.6 Education, sports, art & culture 48.1 75.5 71.6 79.5-23.8 48.8 11. Agriculture & allied activities 19.4 23.5 21.3 23.8 2.3 9.8 11.6 Rural development 3.4 4.7 4.2 4.3-9. 22.2 2.3 Interest payments 45.7 51.6 45.9 47.3 22.8.6 2.9 Pensions 5.1 5. 5. 51. -86.5 88.6 2. Police 44.5 56.6 5.1 53.1 4.6 12.5 6. Capital spending 83.6 275.1 227. 264. 12.6 171.4 16.3 Water supply & sanitation 4.8 4.4 4.3 6.6 22.9-11.2 55. Agriculture 7.3 13.3 13.5 17.8 8.4 84.2 31.8 Rural development 11.2 23.9 23.1 26.9 37.6 17.1 16.1 Irrigation & flood control 4.7 13.8 7.1 14.4 25.1 52.2 12.8 Energy 7. 62.5 46.8 47.1 134.2 568.7.7 Transport 8.3 12.5 11.3 8.6 18. 36.3-23.9 Fiscal deficit 55.7 128.8 64.1 84.5 % of GDP 4.4 8.5 4.5 5.4 Revenue deficit -21.7-92.5-114.3-13.8 % of GDP -1.7-6.1-8.1-8.3 Primary deficit 1.1 77.2 18.2 37.2 % of GDP.8 5.1 1.3 2.4 Gross market borrowings 29.2 6.3 65.7 68. 29.6 125.5 3.5 % of GDP 2.3 4. 4.7 4.3 Net market borrowings 2.2 38. 43.5 5.5 29.6 114.7 16.1 % of GDP 1.6 2.5 3.1 3.2 Outstanding debt 66.7 682.2 654. 73.5 9.6 7.8 7.6 % of GDP 48.1 44.9 46.4 44.7 GSDP (at current prices) 1,262.3 1,519.2 1,48.9 1,573.8 6. 11.6 11.7 April 218 65

Exhibit 143: Break-up of total revenue receipts (% of GDP) Exhibit 144: Further details of tax receipts (% of total taxes) Taxes Non-tax revenue (% of GDP) 19. 17.5 18.4 17.3 19.5 25.3 23.7 25.5 11.1 1.9 11. 12.7 13.7 12.9 15.6 15.4 (% of total taxes) 7% Share in central taxes 54% Excise 3% SGST 29% Property & Capital Transaction 1% Sales, trade etc 6% Exhibit 145: Change in key budget items (% YoY) Rev receipts Rev spending Cap spending 25 2 (% YoY) 15 1 5 (5) Exhibit 146: Share of SPI in revenue spending (% of total spending) 4.4 39.7 4. 4.9 38. 41.2 4. 46.6 13.8 13.3 12.6 1.4 1.3 1.2 11.4 1. 1.8 11.1 12. 1.2 11.5 1.6 1.5 9.2 Interest payments Pension Salary & wages (% of total spending) Exhibit 147: Key details of revenue spending by department (% of total) 39% Pension 1% Education etc 16% Police 1% Energy 16% Interest 9% Exhibit 148: Key details of capital spending by department (% of total) 61% Transport 3% Agriculture 7% Energy 18% Rural devt 11% Exhibit 149: Fiscal deficit and revenue balance (% of GDP) Exhibit 15: Debt to GDP ratio Fiscal deficit Revenue balance (% of GDP) 8.1 8.3 5.7 5.6 4.8 4.8 5.4 4.4 4.5 1.3 1.7.1 (.4) (.5) 44.7 46.4 46.5 46.7 46.2 48.1 49.1 (% of GDP) April 218 66

Jharkhand Population: ~35m (2.8% of India s population) Nominal GSDP in FY19: INR 3.1t (~1.7% of India s nominal GDP) Fiscal deficit in FY19 at 2.4% of GSDP Total liabilities in FY19 at 25.8% of GSDP INR b % YoY Total receipts 47.9 656.7 66.4 692. 15.8 4.2 4.8 Revenue receipts 47.5 656.1 659.8 691.3 15.8 4.2 4.8 Total taxes 324.4 49.3 411.1 462.5 18.2 26.7 12.5 States' own taxes 133. 199. 184. 192.5 15.9 38.4 4.6 SGST. 9. 16. 17.8 Share in central taxes 191.4 21.3 227.1 27. 19.9 18.7 18.9 Non-tax revenue receipts: State 53.5 112.6 112.6 9.3-8.6 11.4-19.8 Grants from the Centre 92.6 134.1 136.1 138.5 26.2 46.9 1.8 Non-debt capital receipts.4.7.7.7 23.8 71.6 6.1 Total spending 639. 726.2 729.9 766.9 22.4 14.2 5.1 Revenue spending 517.8 578.6 582.2 627.4 41.7 12.4 7.8 Education, sports, art & culture 79.8 13.6 94. 17.4 21.9 17.9 14.2 Agriculture & allied activities 22.1 3.6 3.9 31.7 49.6 4. 2.6 Rural development 72.5 83.8 76. 9.5 73.7 4.9 19. Interest payments 41.7 44.7 44.7 56.3 25.7 7.1 26. Pensions 41.4 57.9 58.4 56. 3.6 41.3-4.2 Police 3.5 34.9 4.1 43.5 6.3 31.5 8.4 Capital spending 121.1 147.6 147.6 139.5-22.5 21.9-5.5 Water supply & sanitation 2.2 3.9 3.9 5.2 14.4 74.7 34.5 Agriculture 5.7 6.9 6.6 6.4 396.6 15.5-2.5 Rural development 2.7 2.7 2.9 27.2 18.4.7 3.2 Irrigation & flood control 14.3 2.6 19.7 2.9 23.4 37.9 6.3 Energy.... Transport 45. 51.3 51.4 41.4 29.6 14.1-19.5 Fiscal deficit 168. 69.5 69.4 74.9 % of GDP 6.2 2.3 2.5 2.4 Revenue deficit 47.3-77.5-77.6-63.9 % of GDP 1.7-2.6-2.8-2.1 Primary deficit 126.3 24.8 24.8 18.6 % of GDP 4.7.8.9.6 Gross market borrowings 51.5 7. 7. 8. -3.7 35.8 14.3 % of GDP 1.9 2.3 2.5 2.6 Net market borrowings 47.3 58.1 58.1 65.1-3.7 22.9 12.2 % of GDP 1.7 1.9 2.1 2.1 Outstanding debt 668.3 782. 744.7 833.7 18.2 11.4 11.9 % of GDP 24.7 25.2 25.8 25.8 GSDP (at current prices) 2,75.2 3,34.5 2,794.5 3,87.9 19.5 3.3 1.5 April 218 67

Exhibit 151: Break-up of total revenue receipts (% of GDP) Taxes Non-tax revenue (% of GDP) 8.1 8.9 7.4 5.5 4.5 5.9 5.8 5.4 1.8 1.6 1. 12.1 12. 13.5 14.7 15. Exhibit 152: Further details of tax receipts (% of total taxes) Share in central taxes 58% 6% SGST 23% Property & Capital Transaction 2% Sales, trade etc 11% Exhibit 153: Change in key budget items (% YoY) Exhibit 154: Share of SPI in revenue spending (% of total spending) 15 1 5 (5) Rev receipts Rev spending Cap spending (% YoY) Interest payments Pension Salary & wages (% of total spending) 28.9 27.5 23.2 21.7 16.7 18.9 19.8 2.4 14.9 12.5 1.9 1.9 8. 1. 1. 8.9 1.2 11.2 9.2 9.1 8.1 7.7 7.7 9. Exhibit 155: Key details of revenue spending by department (% of total) 51% Education etc 17% Rural devt 14% Exhibit 156: Key details of capital spending by department (% of total) Transport 34% 22% Agriculture 5% Pension 9% Interest 9% Irrigation & flood control 17% Rural devt 22% Exhibit 157: Fiscal deficit and revenue balance (% of GDP) Exhibit 158: Debt to GDP ratio (% of GDP) 2.2.9 1.3 1.6 Fiscal deficit 3.3 5.1 1.8 Revenue balance 6.2 2.3 2.6 2.5 2.8 2.4 2.1 25.8 25.8 25.2 24.7 25. (.1) (1.7) 22.1 21.8 23. (% of GDP) April 218 68

Karnataka Population: ~63.5m (5% of India s population) Nominal GSDP in FY19: INR 14.1t (~7.8% of India s nominal GDP) Fiscal deficit in FY19 at 2.5% of GSDP Total liabilities in FY19 at 19.2% of GSDP. INR b % YoY Total receipts 1,333.4 1,45.3 1,461.7 1,629.7 11.8 9.6 11.5 Revenue receipts 1,332.1 1,448.9 1,46.3 1,627.6 12.1 9.6 11.5 Total taxes 1,117.2 1,218.6 1,234.7 1,396.6 12.2 1.5 13.1 States' own taxes 829.6 899.6 917.2 1,34.4 9.8 1.6 12.8 SGST. 24.9 416.5 73.6 Share in central taxes 287.6 319.1 317.5 362.2 19.9 1.4 14.1 Non-tax revenue receipts: State 57.9 69.4 68.3 81.6 8.2 17.8 19.6 Grants from the Centre 157. 16.8 157.4 149.4 12.7.2-5. Non-debt capital receipts 1.3 1.4 1.4 2. -69.2 8.5 48.4 Total spending 1,62.1 1,783.9 1,815. 1,981. 17.1 12. 9.1 Revenue spending 1,319.2 1,447.6 1,456.5 1,626.4 12.7 1.4 11.7 Education, sports, art & culture 2.8 194.3 192.3 259.5 7.3-4.3 35. Agriculture & allied activities 119.8 142. 15. 16.8 7.4 25.3 7.2 Rural development 55.5 64.3 64. 68.2 6.2 15.4 6.6 Interest payments 12.3 141.6 141.7 162.1 12. 17.7 14.4 Pensions 113. 131.8 12.6 148..4 6.8 22.7 Police 37.1 4.4 42. 57.5 5.5 13.1 37. Capital spending 3.9 336.3 358.5 354.6 4.8 19.2-1.1 Water supply & sanitation 4.3 6.3 5.8 5.2.8 34.8-1.3 Agriculture 5. 2.3 2.3 1.5 174.4-54.3-32.7 Rural development.5 1.5 1.2.7 643.5-2. -43.4 Irrigation & flood control 86.3 124.3 16.9 121.7 24.2 23.8 13.8 Energy 8.6 8.3 8.3 6.3 1,644.3-4. -24. Transport 76.2 64.5 77.5 56.4 41.2 1.7-27.3 Fiscal deficit 286.7 333.6 353.3 351.3 % of GDP 2.6 2.5 2.7 2.5 Revenue deficit -12.9-1.4-3.8-1.3 % of GDP -.1... Primary deficit 166.3 192. 211.7 189.2 % of GDP 1.5 1.5 1.6 1.3 Gross market borrowings 28.1 347.2 347.2 363.2 73. 24. 4.6 % of GDP 2.5 2.6 2.6 2.6 Net market borrowings 24.3 299.7 299.7 289. 73. 24.7-3.6 % of GDP 2.2 2.3 2.3 2.1 Outstanding debt 2,11.7 2,292.1 2,387.8 2,711.4 2.2 13.1 13.6 % of GDP 18.9 17.5 18.2 19.2 GSDP (at current prices) 11,173.3 13,18.8 13,18.8 14,86.9 51.8 17.3 7.5 April 218 69

Exhibit 159: Break-up of total revenue receipts (% of GDP) 2.3 2.2 2.8 2.6 12.8 12.7 12.4 13.5 Taxes 1. 9.3 9.4 9.9 Exhibit 16: Further details of tax receipts Non-tax revenue (% of total taxes) Share in (% of GDP) central taxes Property & 26% Capital 1.9 1.8 1.7 1.6 Transaction 8% 23% Excise 13% SGST 3% Exhibit 161: Change in key budget items (% YoY) 5 Rev receipts Rev spending Cap spending 4 3 2 1 (1) Exhibit 162: Share of SPI in revenue spending (% of total spending) 2.6 19.9 19. 17.5 16.3 17.5 16.7 2.1 9.5 1.3 9.8 9.6 8.6 9.1 8.3 9.1 9. 8.8 9.1 9.2 9.1 9.8 9.7 1. Interest payments Pension Salary & wages (% of total spending) Exhibit 163: Key details of revenue spending by department Exhibit 164: Key details of capital spending by department (% of total) 59% Education etc 16% Energy 6% Pension 9% Interest 1% (% of total) Transport 19% Irrigation & flood control 41% 22% Urban devt 8% Welfare of SCs/STs 1% Exhibit 165: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 2.8 2.9 2.9 2.6 2.6 2.5 2.7 2.5 Exhibit 166: Debt to GDP ratio (% of GDP) 18.2 19.2 18.9.4.1.1.2.1... 17.3 17.4 16.6 16.8 (% of GDP) April 218 7

Kerala Population: ~34m (2.7% of India s population) Nominal GSDP in FY19: INR 7.7t (~4.1% of India s nominal GDP) Fiscal deficit in FY19 at 3.1% of GSDP Total liabilities in FY19 at 3.7% of GSDP INR b % YoY Total receipts 759.3 938.5 885.8 1,31.4 9.7 16.6 16.4 Revenue receipts 756.1 935.8 882.7 1,28. 9.5 16.7 16.5 Total taxes 574. 73. 657.2 785.2 11.1 14.5 19.5 States' own taxes 421.8 534.1 488.2 585.9 8.2 15.8 2. SGST. 162. 27. 66.7 Share in central taxes 152.3 168.9 168.9 199.3 2. 1.9 18. Non-tax revenue receipts: State 97. 12.4 117.3 142.7 15.1 2.9 21.7 Grants from the Centre 85.1 112.4 18.2 1.1-4.6 27.2-7.5 Non-debt capital receipts 3.2 2.6 3.1 3.4 78.5-3.8 8. Total spending 1,23.8 1,196. 1,113.5 1,27.9 17.6 8.8 14.1 Revenue spending 911. 1,96.3 1,13.5 1,156.6 15.8 11.3 14.1 Education, sports, art & culture 17.6 197. 184.7 199.9 2.8 8.2 8.3 Agriculture & allied activities 6.9 63.3 63.5 72.7 26.9 4.2 14.6 Rural development 12.8 44.7 16.7 44.8-49.3 3.3 168.4 Interest payments 121.2 136.3 135.3 149.4 9.1 11.6 1.4 Pensions 152.8 181.7 17.6 182.2 17. 11.7 6.8 Police 31. 37.3 36.4 38.7 21. 17.4 6.2 Capital spending 112.9 99.7 1.1 114.3 35.3-11.4 14.3 Water supply & sanitation 2.1 5.1 3. 1.4 168.8 4.9 245.4 Agriculture 6.5 7.9 8.3 7.7 22.3 28. -8. Rural development 6.2 5.5 4.8 6.7 4.7-13.1 39.7 Irrigation & flood control 6.7 7.6 9.1 6.7 28.2 34.8-26.6 Energy...2.1 - - - Transport 35.9 25.8 33.1 26.8 7.8-7.7-19.1 Fiscal deficit 264.5 257.6 227.7 239.6 % of GDP 4.3 3.4 3.3 3.1 Revenue deficit 154.8 16.4 13.8 128.6 % of GDP 2.5 2.1 1.9 1.7 Primary deficit 143.3 121.2 92.5 9.2 % of GDP 2.3 1.6 1.3 1.2 Gross market borrowings 173. 245.2 222.1 259.9 15.3 28.4 17. % of GDP 2.8 3.3 3.2 3.4 Net market borrowings 146.9 22.2 179.1 24.7 15.3 22. 14.3 % of GDP 2.4 2.7 2.6 2.6 Outstanding debt 1,864.5 2,7.3 2,17.9 2,372.7 18.5 13.1 12.6 % of GDP 3.2 27.7 3.7 3.7 GSDP (at current prices) 6,17.4 7,479.5 6,865. 7,728.9 1.6 11.3 12.6 April 218 71

Exhibit 167: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 3.1 3. 3.1 3.3 3.1 1.8 2.1 2.9 9. 8.5 8.4 9.3 9.3 9.4 9.6 1.2 Exhibit 168: Further details of tax receipts (% of total taxes) 1% Share in central taxes 25% Property & Capital Transaction 5% SGST 35% Sales, trade etc 25% Exhibit 169: Change in key budget items (% YoY) 75 Rev receipts Rev spending Cap spending Exhibit 17: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 5 32.3 31.9 29.7 29.9 3.8 29.1 31. 28.5 25 (25) 16.6 16.5 15.7 16.6 16.8 16.6 16.8 15.8 13.5 13.7 13.6 14.1 13.3 12.4 13.3 12.9 Exhibit 171: Key details of revenue spending by department (% of total) 54% Pension 16% Education etc 17% Interest 13% Exhibit 172: Key details of capital spending by department 54% Transport 26% Agriculture 7% Rural devt 7% Irrigation & flood control 6% Energy % Exhibit 173: Fiscal deficit and revenue balance (% of GDP) Exhibit 174: Debt to GDP ratio (% of GDP) (% of GDP) Fiscal deficit Revenue balance 4.3 3.6 3.6 3.6 3.2 3.4 3.3 3.1 (1.7) (2.3) (2.4) (2.7) (2.5) (2.1) (1.9) (1.7) 3.7 3.7 27.7 3.2 28.2 26.4 25.6 25.1 (% of GDP) April 218 72

Madhya Pradesh Population: ~76.5m (6.% of India s population) Nominal GSDP in FY19: INR 8.3t (~4.2% of India s nominal GDP) Fiscal deficit in FY19 at 3.2% of GSDP Total liabilities in FY19 at 26.3% of GSDP INR b % YoY Total receipts 1,241. 1,442.7 1,42.1 1,599. 17.4 13. 14. Revenue receipts 1,233.1 1,391.2 1,35.7 1,558.9 16.9 9.5 15.4 Total taxes 92.6 1,14. 971.9 1,141.5 14.8 7.7 17.4 States' own taxes 441.9 53. 463.4 546.6 9.8 4.9 18. SGST. 98.2 21.1 14.8 Share in central taxes 46.6 511.1 58.5 594.9 2. 1.4 17. Non-tax revenue receipts: State 9.9 116.8 95.2 19.3 6. 4.8 14.8 Grants from the Centre 239.6 26.3 283.6 38.1 3.7 18.4 8.6 Non-debt capital receipts 8. 51.5 51.4 4.2 317.5 545.4-21.8 Total spending 1,517.7 1,699.5 1,642.9 1,866.9 26.7 8.3 13.6 Revenue spending 1,195.4 1,345.2 1,345. 1,556.2 19.8 12.5 15.7 Education, sports, art & culture 211.4 251.8 231.3 269.9 24. 9.4 16.7 Agriculture & allied activities 13.1 111.7 19.8 163.4 37.9 6.5 48.9 Rural development 88.2 81.8 76.1 87.1 44.4-13.7 14.4 Interest payments 9.8 115.4 119.6 128.7 12.2 31.8 7.5 Pensions 87.9 123.7 15.5 125.6 12.5 2. 19. Police 45. 55. 52.3 61.5 8.4 16.1 17.6 Capital spending 322.3 354.4 298. 31.6 61.2-7.5 4.2 Water supply & sanitation 7.2 17.5 7.5 14.4-2.9 3.9 91.1 Agriculture 6.9 4.4 4.1 5.7 491.5-41.2 39.2 Rural development 31.7 24.6 22.9 31.4 31. -7. 37.5 Irrigation & flood control 84.7 94. 69.4 86.6 32.9-18. 24.7 Energy 46.7 56.8 66.9 21.8 749. 43.4-67.5 Transport 46.7 55.6 55.6 59.3 38.3 19.1 6.6 Fiscal deficit 276.6 256.9 24.8 267.8 % of GDP 4.3 3.5 3.4 3.2 Revenue deficit -37.7-46. -5.8-2.6 % of GDP -.6 -.6 -.1. Primary deficit 185.8 141.5 121.2 139.1 % of GDP 2.9 1.9 1.7 1.7 Gross market borrowings 161. 226.7 196.8 238. 9.5 22.2 21. % of GDP 2.5 3.1 2.8 2.9 Net market borrowings 145.5 211.2 178. 192. 9.5 22.3 7.9 % of GDP 2.3 2.9 2.5 2.3 Outstanding debt 1,625.1 1,833.8 1,883. 2,175.8 23.3 15.9 15.6 % of GDP 25.4 24.9 26.6 26.3 GSDP (at current prices) 6,392.2 7,352.5 7,7.5 8,261.1 13.1 1.6 16.8 April 218 73

Exhibit 175: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 5.3 4.5 4.8 5.2 5.1 5.4 5.1 5.5 14.2 13. 11.9 13.9 14.1 13.8 13.7 13.8 Exhibit 176: Further details of tax receipts (% of total taxes) (% of total) Share in central taxes 52% 16% Excise 8% Property & Capital Transaction 6% SGST 18% Exhibit 177: Change in key budget items (% YoY) Exhibit 178: Share of SPI in revenue spending (% of total spending) 8 6 4 2 (2) (4) Rev receipts Rev spending Cap spending Interest payments Pension Salary & wages 27.9 25.8 25.8 21.9 19.2 21.9 21.2 2.5 7.9 8.5 8.3 7.8 7.4 9.2 7.8 8.1 8.9 9.1 8.6 8.1 7.6 8.6 8.9 8.3 Exhibit 179: Key details of revenue spending by department (% of total) Education etc 18% Exhibit 18: Key details of capital spending by department (% of total) 32% 57% Pension 8% Energy 9% Interest 8% Transport 2% Energy 7% Irrigation & flood control 3% Rural devt 11% Exhibit 181: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 4.3 3.5 3.2 2.6 2.1 2.3 2.2 3.4 1.4 2.5 1.2 1..6.6.1. Exhibit 182: Debt to GDP ratio (% of GDP) 26.3 26.6 25.4 24.8 19.8 21.5 23.5 (% of GDP) April 218 74

Maharashtra Population: ~117.2m (9.3% of India s population) Nominal GSDP in FY19: INR 28.t (~14.9% of India s nominal GDP) Fiscal deficit in FY19 at 1.8% of GSDP Total liabilities in FY19 at 16.5% of GSDP INR b % YoY Total receipts 2,64.4 2,449.6 2,598.6 2,882.3 11. 25.9 1.9 Revenue receipts 2,46.9 2,437.4 2,576. 2,859.7 1.6 25.8 11. Total taxes 1,73.3 1,98.4 2,21.8 2,315.5 1.1 18.7 14.5 States' own taxes 1,366.2 1,534.4 1,649.8 1,88.4 7.9 2.8 14. SGST. 59.8 91.4 76.8 Share in central taxes 337.2 374.1 372. 435.1 2. 1.3 17. Non-tax revenue receipts: State 127.1 21.6 216.7 227.8-5.3 7.5 5.1 Grants from the Centre 216.5 327.4 337.5 316.3 28.1 55.9-6.3 Non-debt capital receipts 17.5 12.3 22.6 22.7 97.9 29.3.4 Total spending 2,45.3 2,837.5 3,6.6 3,388.2 14.4 24.9 1.7 Revenue spending 2,132.3 2,482.5 2,724.5 3,13.4 12. 27.8 1.6 Education, sports, art & culture 453.6 555.3 535.4 591.9 5.8 18. 1.6 Agriculture & allied activities 132.5 119.9 297.9 236.2 37.1 124.9-2.7 Rural development 7.2 12.8 16.3 12.9 25.1 51.4 13.8 Interest payments 285.3 31.3 335.2 343.8 1.7 17.5 2.6 Pensions 168.6 198.1 182.7 27.2 9.9 8.3 13.4 Police 111.9 121. 12. 133.9 14.1 7.2 11.6 Capital spending 318.1 355. 336.1 374.8 33. 5.7 11.5 Water supply & sanitation.2.4.2.3 - - - Agriculture 34.2 51.8 49.9 6.6 9.3 45.9 21.6 Rural development 16.9 34.7 15.1 45.9 15.2-56.4 23.2 Irrigation & flood control 87.6 92.6 99. 93.8 8.7 13. -5.3 Energy 6.6 12.9 11.7 7.3-52.3 77.3-37.4 Transport 54.6 89.9 89.3 88.6 15.6 63.5 -.8 Fiscal deficit 386. 387.9 462. 55.9 % of GDP 1.7 1.5 1.9 1.8 Revenue deficit 85.4 45.1 148.4 153.7 % of GDP.4.2.6.5 Primary deficit 1.6 77.6 126.8 162. % of GDP.4.3.5.6 Gross market borrowings 449.6 45. 45. 66.1 96..1 46.7 % of GDP 2. 1.8 1.8 2.4 Net market borrowings 43.5 364.8 364.8 482.4 96. -9.6 32.3 % of GDP 1.8 1.4 1.5 1.7 Outstanding debt 3,648.2 4,13.4 4,68.1 4,618.1 12.5 11.5 13.5 % of GDP 16.2 16.3 16.3 16.5 GSDP (at current prices) 22,57.3 25,399.2 24,965.1 27,96.9 12.8 1.6 12. April 218 75

Exhibit 183: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 1.7 1.5 1.8 1.5 1.5 2.1 2.2 1.9 8.2 7.6 7.5 7.7 7.5 7.5 8.1 8.3 Exhibit 184: Further details of tax receipts (% of total taxes) (% of total taxes) SGST 38% 9% Excise 6% Share in central taxes 19% Sales, trade etc 15% Property & Capital Transaction 13% Exhibit 185: Change in key budget items (% YoY) Rev receipts Rev spending Cap spending 4 3 Exhibit 186: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 2 1 (1) 8.3 8.4 8. 8.1 7.9 8. 6.7 6.9 (% YoY) 13.7 13.7 13.5 13.5 13.4 12.5 12.3 11.4 38.4 38.6 35. 36. 33.8 35.1 3.8 34.1 Exhibit 187: Key details of revenue spending by department (% of total) Education etc 2% Exhibit 188: Key details of capital spending by department (% of total) Transport 24% 2% 54% Agriculture 8% Interest 11% Pension 7% Irrigation & flood control 26% Rural devt 13% Agriculture 17% Exhibit 189: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 4.3 3.5 3.4 3.2 2.6 2.1 2.3 2.2 2.5 1.4 1.2 1..6.6.1. Exhibit 19: Debt to GDP ratio (% of GDP) (% of GDP) 26.3 26.6 25.4 24.8 19.8 21.5 23.5 April 218 76

Odisha Population: ~43.5m (3.4% of India s population) Nominal GSDP in FY19: INR 4.4t (~2.5% of India s nominal GDP) Fiscal deficit in FY19 at 3.5% of GSDP Total liabilities in FY19 at 2.7% of GSDP INR b % YoY Total receipts 745.6 89.6 898.3 1,3.5 7.8 2.5 11.7 Revenue receipts 743. 889.3 897. 1,2. 7.8 2.7 11.7 Total taxes 511.7 582.2 577.9 651.4 11. 12.9 12.7 States' own taxes 228.5 268. 265.2 285.5 1.4 16. 7.7 SGST. 59.5 12. 11.7 Share in central taxes 283.2 314.2 312.7 365.9 2.1 1.4 17. Non-tax revenue receipts: State 8.4 95. 9. 13. -7.7 11.9 14.4 Grants from the Centre 15.8 212.1 229. 247.6 6.7 51.9 8.1 Non-debt capital receipts 2.6 1.3 1.3 1.5 15.6-5.8 15.4 Total spending 839.4 1,35. 1,42.2 1,158.7 1.1 24.2 11.2 Revenue spending 65.4 822.4 88.2 92.2 1.6 24.3 11.6 Education, sports, art & culture 118.1 157.1 149.5 168.1 6.8 26.6 12.4 Agriculture & allied activities 65. 7.6 65.3 81.1 12..6 24. Rural development 79.9 82.1 1.5 95.2 8. 25.7-5.3 Interest payments 4.4 5. 5. 55. 2.7 23.9 1. Pensions 68.4 113.2 113.2 119.1 7.8 65.4 5.3 Police 25.1 31.4 31.9 32.4 8.4 26.8 1.7 Capital spending 189. 212.6 234. 256.5 8.5 23.8 9.6 Water supply & sanitation 9. 14.9 15.1 17.7 33.4 67.4 17.2 Agriculture 2.2 2.2 2. 2.2-39.3-6.1 8.8 Rural development... 12.5 Irrigation & flood control 58. 7.5 71.6 82.7 39. 23.5 15.4 Energy 2.5 13.9 2.7 16.7 46.4 1. -19.1 Transport 67.7 66.6 69.3 72.7-1.4 2.5 4.8 Fiscal deficit 93.8 144.3 143.9 155.2 % of GDP 2.5 3.5 3.5 3.5 Revenue deficit -92.6-66.9-88.7-99.8 % of GDP -2.5-1.6-2.1-2.3 Primary deficit 53.4 94.3 93.9 1.2 % of GDP 1.4 2.3 2.3 2.3 Gross market borrowings 76.2 12.7 98.3 12.3 7.4 29. 22.4 % of GDP 2. 2.5 2.4 2.7 Net market borrowings 69.6 96.2 98.3 11.3 7.4 41.2 22.4 % of GDP 1.8 2.3 2.4 2.5 Outstanding debt 621.4 767.4 764.8 919.4 19.5 23.1 2.2 % of GDP 16.5 18.6 18.4 2.7 GSDP (at current prices) 3,772. 4,124.8 4,159.8 4,434.8 14. 1.3 6.6 April 218 77

Exhibit 191: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 6.9 6.1 7.4 7.7 7.9 5.7 5.7 6.7 13.9 11.1 1.8 11.5 13.6 14.1 13.9 14.7 Exhibit 192: Further details of tax receipts (% of total taxes) Share in central taxes 56% Property & Capital Transaction 3% Sales, trade etc 11% 12% SGST 18% Exhibit 193: Change in key budget items (% YoY) 6 Rev receipts Rev spending Cap spending (% YoY) 4 2 Exhibit 194: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages 3.5 28.4 3.5 (% of total spending) 27.2 29.2 23.8 26.9 29.9 14.1 13. 12.5 1.8 1.5 13.8 14. 13.2 7.3 6.3 5.5 5.7 6.2 6.1 6.2 6.1 Exhibit 195: Key details of revenue spending by department (% of total) 49% Education etc 19% Pension 13% Agriculture 9% Rural devt 1% Exhibit 196: Key details of capital spending by department Transport 29% 25% Energy 7% Rural devt 5% Irrigation & flood control 34% Exhibit 197: Fiscal deficit and revenue balance (% of GDP) Exhibit 198: Debt to GDP ratio (% of GDP) (% of GDP) Fiscal deficit Revenue balance 3.1 2.5 2.2 3.5 3.5 2.1 2.1 2.3 1.6 1.7 1.9 2.5 1.1 (.) 2.7 18.4 18.6 16.5 15.7 (% of GDP) 13.8 13. 14.5 April 218 78

Punjab Population: ~29.1m (2.3% of India s population) Nominal GSDP in FY19: INR 5.2t (~2.9% of India s nominal GDP) Fiscal deficit in FY19 at 3.8% of GSDP Total liabilities in FY19 at 4.8% of GSDP INR b % YoY Total receipts 481.7 61.6 569.5 738.7 15.4 18.2 27.1 Revenue receipts 479.9 6.8 568.7 738.1 15.6 18.5 27.1 Total taxes 373.5 51.8 461.1 534.9 7.6 23.5 16. States' own taxes 277.5 395.3 354.9 41.6 4. 27.9 15.7 SGST 214.4 Share in central taxes 96. 16.5 16.2 124.3 19.9 1.6 17.1 Non-tax revenue receipts: State 58.6 32.2 51. 12.5 121.2-13.1 11.1 Grants from the Centre 47.8 66.8 56.7 85.7 14.4 18.7 51.2 Non-debt capital receipts 1.8.8.7.6-17.2-58.6-25.6 Total spending 1,1.1 832.5 777.7 935.9 7.9-23. 2.3 Revenue spending 553. 748.6 711.8 863.5 1.4 28.7 21.3 Education, sports, art & culture 88.1 13.6 16.4 112.1 3.1 2.7 5.4 Agriculture & allied activities 57.2 111.9 99.6 154.2-7.8 74.2 54.8 Rural development 2.6 5.7 5.2 6. -44.3 1.1 15. Interest payments 116.4 149.1 151.7 162.6 19. 3.3 7.2 Pensions 87.7 11.5 94.7 13. 12. 7.9 8.8 Police 47.4 52.4 54.7 56.5 5.6 15.3 3.4 Capital spending 457.1 83.9 65.9 72.4 46.3-85.6 9.9 Water supply & sanitation 4.9 8.8 6.4 9.2 46.7 31.3 43.4 Agriculture.9.5 1.2.1 8. 44.1-9.4 Rural development 1.3 3.4 1.7 2.9 51.9-51.1 75.5 Irrigation & flood control 12.6 8.7 4.7 8.4 68.2-62.8 78.3 Energy..5.5.5 - - - Transport 13.5 8.5 11.7 1.4 51.7-13.3-11. Fiscal deficit 528.4 23.9 28.2 197.2 % of GDP 12.3 5. 4.4 3.8 Revenue deficit 73.1 147.8 143.1 125.4 % of GDP 1.7 3.2 3. 2.4 Primary deficit 412. 81.8 56.5 34.6 % of GDP 9.6 1.8 1.2.7 Gross market borrowings 136. 162.6 174.7 194.2 25.9 28.5 11.2 % of GDP 3.2 3.5 3.7 3.7 Net market borrowings 121.4 121.3 133.5 143.6 25.9 9.9 7.6 % of GDP 2.8 2.6 2.8 2.8 Outstanding debt 1,825.3 1,95. 1,959.8 2,115.2 41. 7.4 7.9 % of GDP 42.7 41.9 41. 4.8 GSDP (at current prices) 4,278.7 4,656.1 4,774.8 5,181.7 9.3 11.6 8.5 April 218 79

Exhibit 199: Break-up of total revenue receipts (% of GDP) Taxes Non-tax revenue (% of GSDP) 2.1 3.6 2.3 1.8 2. 2.5 1.7 2.5 1.8 8.9 8.6 8.5 8.9 8.7 9.7 1.3 Exhibit 2: Further details of tax receipts (% of total taxes) 9% Excise 11% Share in central taxes 23% Property & Capital Transaction Sales, trade 5% etc 12% SGST 4% Exhibit 21: Change in key budget items (% YoY) 5 Rev receipts Rev spending Cap spending 4 (% YoY) 3 2 1 (1) Exhibit 22: Share of SPI in revenue spending (% of total spending) 34.8 15.1 34.8 35. 35. 33.5 27.9 29.9 15.1 15.6 15.6 15.9 13.6 13.3 25.3 11.9 17.3 18.8 19.2 19.5 21.1 19.9 21.3 18.8 Interest payments Pension Salary & wages (% of total spending) Exhibit 23: Key details of revenue spending by department Exhibit 24: Key details of capital spending by department (% of total) 38% Education etc 13% Agriculture 18% 34% Sanitation 14% Pension 12% Interest 19% Irrigation & Transport flood 17% control 13% Urban devt 22% Exhibit 25: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 12.3 Exhibit 26: Debt to GDP ratio (% of GDP) 4.8 41. 3.1 2.6 3.1 4.4 4.4 3.8 33.1 42.7 (2.5) (2.) (2.1) (2.2) (1.7) (3.) (2.4) 31.7 3.7 (% of GDP) 31. April 218 8

Rajasthan Population: ~72.2m (5.7% of India s population) Nominal GSDP in FY19: INR 9.4t (~5% of India s nominal GDP) Fiscal deficit in FY19 at 3.% of GSDP Total liabilities in FY19 at 32.8% of GSDP INR b % YoY Total receipts 1,17.4 1,453.2 1,498.2 1,674. 8.9 35.3 11.7 Revenue receipts 1,9.3 1,31.6 1,346.9 1,516.6 8.7 23.5 12.6 Total taxes 779.3 918. 888.4 1,14.1 1.3 14. 14.1 States' own taxes 443.7 545.7 518.2 581. 3.9 16.8 12.1 SGST. 117. 21. 79.5 Share in central taxes 335.6 372.3 37.3 433.1 2.2 1.3 17. Non-tax revenue receipts: State 116.2 144.9 166.6 24. 6.3 43.4 22.4 Grants from the Centre 194.8 238.7 291.9 298.6 4. 49.8 2.3 Non-debt capital receipts 17.1 151.6 151.2 157.3 18.4 782.6 4. Total spending 1,57.9 1,7.7 1,789.4 1,954.4-4.7 13.9 9.2 Revenue spending 1,271.4 1,436.9 1,548.6 1,691.2 19.7 21.8 9.2 Education, sports, art & culture 245. 268.1 28.1 337.2 16.1 14.3 2.4 Agriculture & allied activities 51.4 56.9 57.2 82.3 27.8 11.3 43.8 Rural development 111.4 133.1 177.5 149.7-8.7 59.4-15.7 Interest payments 176.8 196.3 197.9 214.1 47.2 11.9 8.2 Pensions 123. 141.7 149.6 197.1 13.2 21.7 31.8 Police 44.4 5.4 5. 59.4 11.6 12.7 18.9 Capital spending 299.5 263.8 24.8 263.2-48.9-19.6 9.3 Water supply & sanitation 41.9 56.1 48.9 55.1-4.2 16.6 12.7 Agriculture 4.6 4.7 4.5 6. 11. -3. 34.1 Rural development 5.5 5.7 6.5 6. 8.5 15. -8.6 Irrigation & flood control 19.6 25.3 22.6 3.4 49.8 15.2 34.7 Energy 41.2 52.4 43.2 45.9-56.4 4.9 6.3 Transport 24.2 48.8 47.1 52.6-2.2 94.4 11.8 Fiscal deficit 463.5 247.5 291.2 28.4 % of GDP 6.1 3. 3.5 3. Revenue deficit 181.1 135.3 21.7 174.5 % of GDP 2.4 1.6 2.4 1.9 Primary deficit 286.7 51.3 93.4 66.3 % of GDP 3.8.6 1.1.7 Gross market borrowings 16.5 267.1 265.9 355. 1.6 65.6 33.5 % of GDP 2.1 3.2 3.2 3.8 Net market borrowings 143.2 227.2 226. 291.4 1.6 57.8 29. % of GDP 1.9 2.7 2.7 3.1 Outstanding debt 2,55. 2,781.4 2,798.3 3,8.3 21.8 9.7 1.1 % of GDP 33.6 33.6 33.3 32.8 GSDP (at current prices) 7,592.4 8,276.5 8,42.6 9,41.8 12.9 1.7 11.9 April 218 81

Exhibit 27: Break-up of total revenue receipts (% of GDP) Exhibit 28: Further details of tax receipts (% of total taxes) Taxes Non-tax revenue (% of GDP) (% of total) Property & Capital 4.1 4.3 5.4 4.4 4.6 5.5 5.3 Transaction 4.1 5% 1.1 1.1 9.6 1.5 1.3 11.1 1.6 1.8 Share in central taxes 43% 22% Excise 9% SGST 21% Exhibit 29: Change in key budget items (% YoY) Exhibit 21: Share of SPI in revenue spending (% of total spending) 3 2 1 Rev receipts Rev spending Cap spending (% YoY) Interest payments Pension Salary & wages 28.9 26.5 25.5 22.7 23.6 24.3 25.8 2.8 1.8 1.3 1.2 1.2 9.7 9.9 9.7 11.7 (1) 13.1 12. 11.1 11.3 13.9 13.7 12.8 12.7 Exhibit 211: Key details of revenue spending by department Exhibit 212: Key details of capital spending by department (% of total) 42% Pension 12% Education etc 2% Interest 13% Energy 13% (% of total) Transport 2% Energy 18% 29% Irrigation & flood control 12% Sanitation 21% Exhibit 213: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 9.4 6.1 2.9 3.1 3. 3.5 3. 1.8.7 (.2) (.5) (.9) (1.6) (2.4) (2.4) (1.9) Exhibit 214: Debt to GDP ratio 32.8 33.3 33.6 33.6 31.1 24.3 25.1 25. (% of GDP) April 218 82

Tamil Nadu Population: ~74.6m (5.9% of India s population) Nominal GSDP in FY19: INR 16.t (~8.6% of India s nominal GDP) Fiscal deficit in FY19 at 2.8% of GSDP Total liabilities in FY19 at 2.9% of GSDP INR b % YoY Total receipts 1,437.8 1,646.5 1,647.1 1,818.5 1.9 14.6 1.4 Revenue receipts 1,42.3 1,593.6 1,558.2 1,762.5 8.7 11.1 13.1 Total taxes 1,14.8 1,268.1 1,257.9 1,443.2 9.6 13.9 14.7 States' own taxes 859.4 995.9 986.9 1,126.2 6.8 14.8 14.1 SGST 24.9 424.3 76.2 Share in central taxes 245.4 272.2 271. 317.1 2.6 1.4 17. Non-tax revenue receipts: State 99.1 123.2 17.7 113. 11.2 8.6 5. Grants from the Centre 198.4 22.3 192.6 26.3 3. -2.9 7.1 Non-debt capital receipts 35.5 52.8 88.8 55.9 418.9 15.3-37. Total spending 1,999.5 2,66.2 2,54.4 2,263.3 23.2 2.7 1.2 Revenue spending 1,532. 1,752.9 1,741.9 1,937.4 8.7 13.7 11.2 Education, sports, art & culture 26.3 314. 285.7 326.9 4.1 9.7 14.4 Agriculture & allied activities 98.8 113.7 123.1 122. 26.3 24.6 -.9 Rural development 59.2 46.6 35.7 43.8-19.6-39.6 22.6 Interest payments 25.3 252.8 258.1 287.3 13.1 25.7 11.3 Pensions 23.7 227. 237.3 277.8 2.6 16.5 17.1 Police 51.7 57.8 59.2 71.2 1. 14.7 2.2 Capital spending 467.6 313.3 312.5 325.8 119.2-33.2 4.3 Water supply & sanitation 12.9 15.7 9.5 17.3-22.3-26.6 82.4 Agriculture 1. 11.5 8.7 12.2-5.2-13.3 4.2 Rural development 12.4 15.3 17. 22.2-12.4 11.1 3.6 Irrigation & flood control 1.6 28.8 18.6 29.9 42.9 74.6 61.3 Energy 45.2 22.8 1. 4.8 39. -77.8-51.9 Transport 59.2 89.7 16.2 97.6 4.7 79.6-8.1 Fiscal deficit 561.7 419.8 47.4 444.8 % of GDP 4.2 2.8 2.8 2.8 Revenue deficit 129.6 159.3 183.7 174.9 % of GDP 1. 1.1 1.3 1.1 Primary deficit 356.4 167. 149.2 157.5 % of GDP 2.7 1.1 1. 1. Gross market borrowings 372.5 459.3 423.1 55.3 26.3 22.1-1. % of GDP 2.9 3.1 2.9 3.2 Net market borrowings 354996 49.9 373.6 396.8 26.3 15.9-126.5 % of GDP 2.7 2.7 2.6 2.5 Outstanding debt 2,52.4 3,143.7 2,98.9 3,332.2 19.4 15.4 14.6 % of GDP 18.8 2.9 2.1 2.9 GSDP (at current prices) 13,387.7 15,39.7 14,452.3 15,962.5 1.4 8. 1.4 April 218 83

Exhibit 215: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 1.8 2.2 2.5 2.3 2.2 2.2 2.1 2. 11.5 1.5 8.7 8.3 8.3 8.4 8.7 9. Exhibit 216: Further details of tax receipts (% of total taxes) 15% Share in central taxes 23% Property & Capital Transaction 8% SGST 22% Sales trade etc 32% Exhibit 217: Change in key budget items (% YoY) 15 Rev receipts Rev spending Cap spending 1 (% YoY) 5 (5) Exhibit 218: Share of SPI in revenue spending (% of total spending) 28.4 29. 28.8 26.3 26.2 26.4 25.9 26.9 13.6 13.5 13.5 12. 13.3 12.9 13.6 14.3 1.5 11.3 11.3 12.9 13.4 14.4 14.8 14.8 Interest payments Pension Salary & wages Exhibit 219: Key details of revenue spending by department (% of total) 48% Pension 14% Education etc 17% Interest 15% Agriculture 6% Exhibit 22: Key details of capital spending by department (% of total) Transport 34% 32% Agriculture 6% Rural devt 8% Irrigation & flood control 11% Exhibit 221: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 4.2 2.2 2.4 2.5 2.7 2.8 2.8 2.8.2 (.2) (.6) (1.) (1.) (1.1) (1.3) (1.1) Exhibit 222: Debt to GDP ratio (% of GDP) 2.9 2.1 2.9 18.8 17.4 16.5 2.1 2.5 April 218 84

Telangana Population: ~36.8m (2.9% of India s population) Nominal GSDP in FY19: INR 8.4t (~4.4% of India s nominal GDP) Fiscal deficit in FY19 at 3.5% of GSDP Total liabilities in FY19 at 21.4% of GSDP INR b % YoY Total receipts 829.7 1,188.9 1,139.6 1,387.8 8.9 37.3 21.8 Revenue receipts 828.2 1,13.8 1,81.5 1,39.8 8.8 3.6 21.1 Total taxes 632.8 796.2 777.9 929.6 2.9 22.9 19.5 States' own taxes 484.1 626.2 613.7 737.5 21.1 26.8 2.2 SGST 129.1 275.4 113.3 Share in central taxes 148.8 17.1 164.2 192.1 2.5 1.4 17. Non-tax revenue receipts: State 97.8 66. 66. 89.7-32.1-32.5 36. Grants from the Centre 97.5 268.6 237.6 29.4 3.8 143.6 22.2 Non-debt capital receipts 1.6 58.1 58.1 78.1 78. 3,622. 34.4 Total spending 1,182.5 1,449.9 1,374.5 1,678.6 24.4 16.2 22.1 Revenue spending 814.3 1,85.1 1,66. 1,254.5 7.3 3.9 17.7 Education, sports, art & culture 119.5 121. 12.3 125.3 14.2.7 4.1 Agriculture & allied activities 61.2 75.5 73. 169. -5.5 19.3 131.4 Rural development 65.5 25.9 22.7 36.6 37.9-65.3 61.2 Interest payments 86.1 111.4 111.4 116.9 13.9 29.4 5. Pensions 9.1 112.9 112.9 117. 9.7 25.2 3.7 Police 45.1 38.1 38. 43.8 8.7-15.7 15.3 Capital spending 368.2 364.7 38.4 424. 92. -16.2 37.5 Water supply & sanitation 21.1 32.2 29.9 27.5 43. 41.9-8.1 Agriculture 6.8 4.8 4.8 3.6 351.5-3.1-25.1 Rural development 1. 43.1 45.1 37. -7.6 4.5-17.9 Irrigation & flood control 136.6 148.6 1.8 144.2 75.7-26.2 43.1 Energy 15.... 1,94.4-1. - Transport 31.8 2.5 18.4 26.2 83. -42.2 42.3 Fiscal deficit 352.8 261. 234.9 29.8 % of GDP 5.4 3.4 3.2 3.5 Revenue deficit -13.9-45.7-15.5-55.2 % of GDP -.2 -.6 -.2 -.7 Primary deficit 266.7 149.6 123.5 173.9 % of GDP 4.1 2. 1.7 2.1 Gross market borrowings 218.6 264. 264. 315. 57.9 2.8 19.3 % of GDP 3.3 3.5 3.6 3.7 Net market borrowings 84.9 235.3 231.3 268.4 57.9 172.4 16.1 % of GDP 1.3 3.1 3.2 3.2 Outstanding debt 1,278.3 1,45.2 1,511.3 1,82.4 37.3 18.2 19.3 % of GDP 19.5 18.5 2.6 21.4 GSDP (at current prices) 6,542. 7,591.7 7,325.9 8,426.3 13.7 12. 15. April 218 85

Exhibit 223: Break-up of total revenue receipts (% of GDP) Taxes Non-tax revenue (% of GDP) 4.4 4.1 4.5 4.1 3. 2.6 9.1 9.7 1.5 1.6 11. 7.2 Exhibit 224: Further details of tax receipts (% of total taxes) SGST 31% Excise 12% Share in central taxes 22% Property & Capital Transaction 6% Sales, trade etc 29% Exhibit 225: Change in key budget items (% YoY) 1 Rev receipts Rev spending Cap spending Exhibit 226: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 5 18.8 23.4 23.6 19.2 19.5 17.1 (5) (% YoY) 8.3 1.3 1.8 11.1 1.4 1.6 9.3 1. 1.6 1.3 1.4 9.3 Exhibit 227: Key details of revenue spending by department (% of total) 65% Education etc 1% Irrigation 7% Interest 9% Pension 9% Exhibit 228: Key details of capital spending by department (% of total) Transport 8% Irrigation & flood control 43% 32% Sanitation 8% Rural devt 11% Exhibit 229: Fiscal deficit and revenue balance (% of GDP) (% of GDP) Fiscal deficit Revenue balance 5.4 Exhibit 23: Debt to GDP ratio (% of GDP) 21.4 3.3 3.2 3.5 2.6 1.8 19.5.1..2.2.7 16.2 16.1 (% of GDP) April 218 86

Uttarakhand Population: ~1.6m (~.8% of India s population) Nominal GSDP in FY19: INR 2.4t (~1.3% of India s nominal GDP) Fiscal deficit in FY19 at 2.8% of GSDP Total liabilities in FY19 at 24.3% of GSDP INR b % YoY Total receipts 249.2 318.5 3.4 356.9 17.2 2.5 18.8 Revenue receipts 248.9 315.9 297.8 356.6 17.2 19.7 19.7 Total taxes 173.1 28.9 25.4 232.5 17.7 18.6 13.2 States' own taxes 19. 137.8 134.5 149.6 16.2 23.4 11.3 SGST 66.7 63.7 73.9 15.9 Share in central taxes 64.1 71.1 7.8 82.9 2.3 1.5 17. Non-tax revenue receipts: State 13.5 24.7 24.8 34.7 1.3 84.1 4.1 Grants from the Centre 62.3 82.3 67.7 89.3 17.5 8.6 32. Non-debt capital receipts.3 2.5 2.5.3 28.1 626. -87. Total spending 33.9 373.2 354.5 424. 11. 16.7 19.6 Revenue spending 252.7 315.5 297.4 356.3 9.5 17.7 19.8 Education, sports, art & culture 53.7 65. 63.4 77.1 8.8 18.1 21.6 Agriculture & allied activities 17.7 22. 21.8 26.6 11.9 22.7 22.1 Rural development 12.5 14.1 12. 13.7-22.7-3.5 13.4 Interest payments 37.2 44.1 41.8 49.1 25.3 12.2 17.4 Pensions 31.7 42.7 47.5 53.5 2.6 49.8 12.7 Police 14. 15.4 15.7 18.5 22.2 11.8 18.1 Capital spending 51.2 57.7 57.1 67.8 19. 11.5 18.7 Water supply & sanitation 2.1 5.3 6.1 6.3 368.7 184.9 4.1 Agriculture 8.5 1.1.9 1.6 73.6-89.3 73.7 Rural development 8.4 1.8 12.2 15.2 2.5 12.9 24.4 Irrigation & flood control 4.7 3. 3. 4.6-34.1-35.8 53.1 Energy 1.3 1.1.8 1.9 13.4-37.1 127.7 Transport 13.9 13.2 14.8 15. -1.1 6.8 1.4 Fiscal deficit 54.7 54.7 54.2 67.1 % of GDP 2.8 2.5 2.5 2.8 Revenue deficit 3.8 -.4 -.4 -.3 % of GDP.2... Primary deficit 17.4 1.6 12.4 18. % of GDP.9.5.6.7 Gross market borrowings 14.5 61. 61. 73. 167.9-41.6 19.7 % of GDP 5.3 2.8 2.8 3. Net market borrowings 1.8 52.7 52.7 62.9 167.9-47.7 19.3 % of GDP 5.2 2.4 2.4 2.6 Outstanding debt 416. 47.7 524.7 592. 16.3 26.1 12.8 % of GDP 21.3 21.5 24.1 24.3 GSDP (at current prices) 1,956.1 2,19.8 2,176.1 2,437.2 11.3 11.2 12. April 218 87

Exhibit 231: Break-up of total revenue receipts (% of GDP) (% of GDP) Taxes Non-tax revenue 4.9 4.6 4.3 5. 3.7 3.9 4.2 5.1 7.4 7.3 7.5 8.4 8.8 9.5 9.4 9.5 Exhibit 232: Further details of tax receipts (% of total taxes) Excise 12% Share in central taxes 38% Property & Capital Transaction Sales, 6% trade etc 1% SGST 34% Exhibit 233: Change in key budget items (% YoY) 5 Rev receipts Rev spending Cap spending Exhibit 234: Share of SPI in revenue spending (% of total spending) Interest payments Pension Salary & wages (% of total spending) 25 39.9 41.1 36.6 37.6 37.9 37.6 37.7 38.6 (25) (% YoY) 9.8 13.1 11.6 11.4 12.5 13.5 16. 15. 15. 12.7 11.4 12.9 14.7 14. 14. 13.8 Exhibit 235: Key details of revenue spending by department Exhibit 236: Key details of capital spending by department (% of total) 46% Education etc 21% Pension 15% Rural devt 4% Interest 14% (% of total) 38% Transport 23% Irrigation & flood control 7% Sanitation 9% Rural devt 23% Exhibit 237: Fiscal deficit and revenue balance (% of GDP) Fiscal deficit Revenue balance (% of GDP) 3.8 3.5 2.8 2.5 2.8 1.9 1.2 1.4.7.. (.2) (.6) (1.1) Exhibit 238: Debt to GDP ratio (% of GDP) 21.3 2.4 21.1 2.3 2.4 24.3 24.1 (% of GDP) April 218 88

Uttar Pradesh Population: ~211m (16.7% of India s population) Nominal GSDP in FY19: INR 14.9t (~8.2% of India s nominal GDP) Fiscal deficit in FY19 at 3.% of GSDP Total liabilities in FY19 at 29.8% of GSDP INR b % YoY Total receipts 2,571.3 3,196.8 3,53.1 3,537.8 12.9 18.7 15.9 Revenue receipts 2,568.8 3,194. 3,5.3 3,486.2 13.1 18.7 14.3 Total taxes 1,953.9 2,329.1 2,163.7 2,562.5 13.5 1.7 18.4 States' own taxes 859.7 1,115. 949.6 1,227. 6. 1.5 29.2 SGST 286. 286. 494.2 72.8 Share in central taxes 1,94.3 1,214.1 1,214.1 1,335.5 2.3 1.9 1. Non-tax revenue receipts: State 289.4 184.4 175. 288.2 25.1-39.5 64.7 Grants from the Centre 325.4 68.5 711.6 635.5 2.1 118.7-1.7 Non-debt capital receipts 2.6 2.8 2.8 51.7-64.3 9.8 1,717.5 Total spending 3,131.2 3,626.5 3,463.9 3,978.4 9.4 1.6 14.9 Revenue spending 2,365.9 3,71.2 2,865.1 3,215.2 11.2 21.1 12.2 Education, sports, art & culture 522.2 54.9 446.6 551.6 15.8-14.5 23.5 Agriculture & allied activities 56. 437. 324.3 13.5 9.8 479.1-59.8 Rural development 138.5 172.8 178.9 198.6 79.5 29.2 11.1 Interest payments 269.4 332.1 32.8 324.3 25.6 12.4 7.1 Pensions 282.3 358.9 373.4 455. 16.9 32.3 21.8 Police 122. 149.8 137.8 159.7 13. 13. 15.9 Capital spending 765.3 555.3 598.7 763.2 4.1-21.8 27.5 Water supply & sanitation 31.1 41.2 43.9 24.2 37.8 41.3-44.8 Agriculture 39.2 7.2 7.7 8.2 72.6-8.4 6.1 Rural development 22.5 33.8 32.6 36.2-52.7-3.4 11. Irrigation & flood control 52. 4.9 42.3 79.8 2.9-18.6 88.4 Energy 117.4 73.8 81.4 129.8-37.6-3.6 59.4 Transport 226.5 154.5 162.7 25.4 44.1-28.2 26.3 Fiscal deficit 559.9 429.7 41.7 44.5 % of GDP 4.5 3. 3. 3. Revenue deficit -22.8-122.8-185.2-271. % of GDP -1.6 -.8-1.3-1.8 Primary deficit 29.5 97.6 18. 116.2 % of GDP 2.3.7.8.8 Gross market borrowings 41.5 436. 416.5 496. 36.8 1.5 19.1 % of GDP 3.3 3. 3. 3.3 Net market borrowings 369. 391.8 372.2 369.1 36.8.9 -.8 % of GDP 3. 2.7 2.7 2.5 Outstanding debt 3,734.2 4,14.9 4,64.7 4,433.6 15.3 8.9 9.1 % of GDP 29.9 28.6 29.5 29.8 GSDP (at current prices) 12,476.6 14,457.7 13,786.4 14,889.3 13.5 1.5 8. April 218 89

Exhibit 239: Break-up of total revenue receipts (% of GDP) Exhibit 24: Further details of tax receipts Taxes Non-tax revenue (% of total (% of GDP) taxes) Share in Property & 4.2 4.5 5.5 5. 4.9 6. 6.2 central Capital 6.4 taxes Transaction 52% 8% 15.9 15.1 14.7 15.7 15.7 16.1 15.7 17.2 12% Excise 9% SGST 19% Exhibit 241: Change in key budget items (% YoY) 75 Rev receipts Rev spending Cap spending 5 25 (25) (% YoY) (5) Exhibit 242: Share of SPI in revenue spending (% of total spending) 2.7 2.6 22.7 34.7 35.8 31. 3. 32.1 12.7 12.3 13. 11.4 11.9 11.7 13. 14.2 12. 11. 11. 1.1 11.4 1.8 1.6 1.1 Interest payments Pension Salary & wages (% of total spending) Exhibit 243: Key details of revenue spending by department Exhibit 244: Key details of capital spending by department (% of total) 53% Education etc 17% Pension 14% Rural devt 6% Interest 1% (% of total) Transport 28% 39% Energy 17% Rural devt 5% Irrigation & flood control 11% Exhibit 245: Fiscal deficit and revenue balance (% of GDP) Fiscal deficit Revenue balance (% of GDP) 5.3 4.5 3.4 2.6 2.8 3. 3. 3. 2.3 1.6 1.8 1.2 1.3 1.3.7.8 Exhibit 246: Debt to GDP ratio (% of GDP) (% of GDP) 29.8 29.5 28.6 29.9 29.5 27.9 28.3 3.9 April 218 9

West Bengal Population: ~92.4m (7.3% of India s population) Nominal GSDP in FY19: INR 1.5t (~5.9% of India s nominal GDP) Fiscal deficit in FY19 at 2.3% of GSDP Total liabilities in FY19 at 37.6% of GSDP INR b % YoY Total receipts 1,21.7 1,434.5 1,366.2 1,495.7 8.9 12.9 9.5 Revenue receipts 1,178.3 1,426.4 1,33.3 1,467.5 7.4 12.9 1.3 Total taxes 9.9 1,53. 995.8 1,16.4 13.1 1.5 11.1 States' own taxes 454.7 557.9 5.7 552. 7. 1.1 1.2 SGST 128.6 23.6 79.3 Share in central taxes 446.3 495.1 495.1 554.4 2.1 1.9 12. Non-tax revenue receipts: State 29.5 22.2 31.7 34. 58.4 7.6 7. Grants from the Centre 247.9 351.3 32.8 327.1-12.1 22.1 8. Non-debt capital receipts 32.3 8. 35.9 28.2 117.7 11. -21.3 Total spending 1,464.5 1,628. 1,663.2 1,733.8 1.9 13.6 4.2 Revenue spending 1,339.2 1,426.4 1,44.4 1,467.5 12.7 7.6 1.9 Education, sports, art & culture 234.7 293.7 255.2 298.6 12.2 8.7 17. Agriculture & allied activities 32.7 45.8 46.3 5.7-7.3 41.8 9.5 Rural development 128.4 155. 161.2 18.1-16.9 25.6 11.7 Interest payments 257. 258.4 276. 371.4 11.2 7.4 34.6 Pensions 139.4 161.3 146.7 157.1 8.4 5.2 7.1 Police 51.8 55.9 55.8 6.4 6.1 7.6 8.3 Capital spending 125.3 21.6 222.8 266.3-5.6 77.8 19.5 Water supply & sanitation 1.2 1.1 18.1 18.3-3.7 1,462.9 1.3 Agriculture 6.1 13.6 1.9 13.6-18.1 78.3 25.2 Rural development 7.7 13.8 21.8 33.8 2,482.3 57.6 55.2 Irrigation & flood control 16.1 31.4 2.6 3..9 27.4 45.9 Energy 7.3 11.8 9.1 15.5-59.6 24.9 71.4 Transport 2.2 28.8 42.3 37.6 2.6 19. -11.1 Fiscal deficit 253.9 193.5 297. 238.1 % of GDP 2.6 2. 3. 2.3 Revenue deficit 16.9. 11.1. % of GDP 1.6. 1.1. Primary deficit -3.2-64.9 21. -133.3 % of GDP. -.7.2-1.3 Gross market borrowings 344.3 444.8 379.7 439.5 43.5 1.3 15.7 % of GDP 3.5 4.9 3.8 4.5 Net market borrowings 312.3 328.8 263.7 315.5 43.5-15.6 19.7 % of GDP 3.2 3.6 2.6 3.3 Outstanding debt 3,376.8 3,66.9 3,64.2 3,948.3 1.3 7.8 8.5 % of GDP 34.1 36.9 36.8 37.6 GSDP (at current prices) 9,916. 9,923.7 9,899.5 1487. 5.4 -.2 5.9 April 218 91

Exhibit 247: Break-up of total revenue receipts (% of GDP) Exhibit 248: Further details of tax receipts Taxes Non-tax revenue (% of total (% of GDP) Support Property & taxes) from Capital 4.1 3.7 Centre* Transaction 3.4 2.4 2. 2.8 3.2 2.8 5% 7% 8.9 8.4 8. 8.5 9.2 11.7 1. 11.4 12% Excise 1% SGST 21% Exhibit 249: Change in key budget items (% YoY) Rev receipts Rev spending Cap spending 8 (% YoY) 6 4 2 (2) Exhibit 25: Share of SPI in revenue spending (% of total spending) 34.5 3.1 29.9 13.4 12.7 26.9 25.9 27.4 27.1 11.7 1.8 1.4 11.3 1.2 21.4 22.6 2.8 19.5 19.2 18.1 19.2 Interest payments Pension Salary & wages (% of total spending) 28.7 1.7 25.3 Exhibit 251: Key details of revenue spending by department Exhibit 252: Key details of capital spending by department (% of total) 32% Pension 11% Interest 25% Education etc 2% Rural devt 12% (% of total) 55% Transport 14% Rural devt 13% Energy 6% Irrigation & flood control 12% Exhibit 253: Fiscal deficit and revenue balance (% of GDP) Fiscal deficit Revenue balance 3.2 3.6 3.4 2.2 2.6 3. 2.1 2.5.. (1.) (1.1) (2.3) (1.6) (2.7) (2.1) Exhibit 254: Debt to GDP ratio (% of GDP) (% of GDP) 4.8 36.6 4.6 34.5 32.6 34.7 35.7 38.1 April 218 92

THEMATIC/STRATEGY RESEARCH GALLERY