Sops announced by states may divert resources away from infra development: RBI article

Several states announced sops in their 2024-25 Budgets, risking diversion of resources from critical infrastructure. Centre and states achieved fiscal moderation in H1:2024-25 due to robust receipts. Higher tax collections and large surplus transfers boosted non-tax revenues. Government spending expected to pick up pace in H2:2024-25. Centre aims for a fiscal deficit target of 4.9 per cent of GDP.