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MOSL: Morning India (30/June/21): 1. EcoScope (General government fiscal deficit at 13.3% of GDP in FY21); 2. Repco Home Finance; 3. Expert Speak (Economy)

MOrning India (30/June/21):

Today’s top research idea

EcoScope: General government fiscal deficit at 13.3% of GDP in FY21

• Based on the monthly accounts available for 18 states (together accounting for ~90% of all states), total spending by the states increased 5.5% YoY in FY21, with total receipts falling 5.2% YoY. Therefore, the states' fiscal deficit rose to INR8t (or 4% of GDP) in FY21 from INR5t (or 2.5% of GDP in FY20).
• States' total tax receipts (inclusive of devolution from the center) declined 5.5% in FY21, marking the second consecutive fall; this was following a contraction of 4% YoY a year ago. The states' own taxes fell (by 4%) for the first time in the past three decades. Non-tax receipts (revenue + capital) of all the states also fell 4.5% in FY21 vis-à-vis 20% growth in FY20.
• Within the total expenditure, states' revenue spending grew 6.3% YoY and capital expenditure (capex) was up just 0.9% YoY in FY21. Notably, after falling more than 20% YoY over Apr-Dec'20, the states' capex grew 37.4% YoY in 4QFY21, partly supported by a low base and partly by higher receipts.
• India's nominal/real GDP contracted 3%/7.3% in FY21, marking the worst contraction since independence. However, government spending (consumption + investments) rose 6.7%/2% in nominal/real terms in FY21, in contrast with sharp decline of 6.8%/10% in nominal/real terms in private spending last year.

• Piping hot news

  REIT, InvIT investments to get easier; SEBI cuts trading lot size, minimum subscription amount

  To deepen the market for REITs and InvITs, Sebi on Tuesday decided to reduce the minimum subscription amount and trading lot size for such publicly issued emerging investment vehicles. The minimum application value will be in the range of Rs 10,000-15,000 and trading lot will be of one unit for REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts), Sebi said in a release after its board meeting on Tuesday.