States' fiscal deficit likely to reach 4.3% of GDP in 2021-22: IndRa The agency had earlier forecast FY21 fiscal deficit of states to be at 4.5 per cent but revised it later due to a sharper-than-expected contraction of 6.1 per cent y-o-y in the nominal GDP PTI | February 16, 2021 | Updated 08:36 IST The agency estimates the nominal GDP to grow 14.5 per cent in FY22, and believes a gradual pick-up in revenue collections could lead to an improvement in the capital expenditure from FY22 The aggregate fiscal deficit of states is likely to be at 4.3 per cent of the gross domestic product (GDP) in 2021-22 compared to 4.6 per cent in 2020-21, says a report by India Ratings and Research. The rating agency has revised the outlook on state finances to stable for FY22 from stable-to-negative.