Freebies Weigh On State Finances: RBI Report

Mumbai: A Reserve Bank report on Thursday sounded a note of caution saying sops like farm loan waiver, free power and transport, by States could crowd out their critical resources for social and economic infrastructure.

The RBI’s ‘State Finances: A Study of Budgets of 2024-25’, however, said State governments have made commendable progress towards fiscal consolidation by containing their aggregate gross fiscal deficit within 3 per cent of GDP for three consecutive years.