In a bid to enhance revenue receipts and contain the revenue expenditure, 27 states have proposed major policy initiatives in their budgets for 2002-03 to rein in their fiscal deficits.

The move assumes significance in the light of the state governments experiencing fiscal stress in recent years as is evident from the large and increasing fiscal and revenue deficits.

That the states' fiscal position has deteriorated in recent years is underscored by the fact that their gross fiscal deficit in 2001-02 increased to Rs 1,06,595 crore (4.6 per cent of gross domestic product) as against the previous year's Rs 89,532 crore (4.3 per cent of GDP).

The states that have proposed major policy initiatives in the budgets for 2002-03 are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, West Bengal, Uttar Pradesh and NCR Delhi.

The measures proposed in the state budgets are aimed at revenue augmentation, expenditure compression, reforms of public sector undertakings, promotion of private investment in crucial sectors and institutional reforms.

They broadly aim at enhancement of revenue receipts through revision of tax rates, broadening of the tax base and improved tax compliance.

Other important initiatives relate to the preparatory work for the introduction of value added tax and rationalisation of user charges, mainly relating to power, water, transport, etc.

On the expenditure front, a number of states have proposed containment of revenue expenditure through a set of economy measures such as restrictions on fresh recruitment/creation of new posts and curbing the growth in administrative expenditure.

Some states have proposed introduction of a new contributory pension scheme for newly recruited staff. A few states have set up committees/commissions relating to fiscal reforms.

The institutional reforms proposed in the state budgets aim at fiscal stability and sustainability.