Fiscal pressure on states to rise due to freebies: Emkay

However, the FY25 estimate of 3 percent is still higher than FY24's 2.8 percent, with several states facing fiscal stress.

- TDG NETWORK

Several states are showing signs of fiscal pressure because of the freebies and capital investment is likely to be the casualty, said Emkay Global in its states finance report.

Highlighting the issue, the report said that states may try to rationalize their spending on these schemes but they will face pressure.

"Thus, while states may try to rationalize their spending on these schemes, the genie is now out of the bottle - we expect fiscal pressure on states to only increase from here on with capex (especially discretionary capex) likely to be the casualty," the report said.