States with higher number of COVID-19 patients at greater risk of fiscal slippages: ICRA

Kolkata, Apr 8 () States having higher number ofCOVID-19 patients run the risk of fiscal slippages, as theyhave to ramp up spending on health-related services to containthe outbreak, ratings agency ICRA said on Wednesday.

The states which witnessed the return of considerablemigrant workers and have a sizeable number of daily wageearners, could see a sharp rise in their revenue expenditureduring the current financial year, ICRA said in a statement.

It said those state governments which have a largerportion of their revenue receipts dependent on GSTcompensation, face greater revenue and liquidity risk ascollection from the cess would be adversely impacted duringthe year.

The ratings agency also said the COVID-19 outbreakwould have an adverse impact on the other components ofstates' own taxes, including sales tax/VAT on petroleumproducts and motor vehicles tax.

Cautious spending on non-essential services liketourism, hospitality and recreation is likely to widen the gapbetween state GST collection and the projected revenues of2020-21, ICRA added. DCRBT RBT