 During the year FY23, the allocation under the Scheme has been raised to ₹1.

1.05 lakh crore to give further

impetus to State Capex plans.
Overall, The COVID-19 pandemic has impacted state finances by increasing expenses and lowering revenues. The
Union government has offered support through various initiatives, while states have taken measures to increase
their revenue, such as revising property taxes, power tariffs, liquor policies, and privatizing state public sector
enterprises. Some states have also adopted revenue-generating measures such as liquidation schemes for
payment of arrears, one-time settlement of old VAT dues, and green taxes to discourage use of old vehicles. The
RBI has pointed out the low property tax collection in India compared to OECD countries and the need for reforms
in property taxation practices.

DEBT PROFILE OF THE GOVERNMENT

The global economy is facing significant concerns
over rising government liabilities, resulting from
the unprecedented fiscal expansion in 2020. The
International Monetary Fund projects that global
government debt will be 91% of GDP in 2022, 7.5
percentage points higher than pre-pandemic
levels. Against this global backdrop, It is crucial to
analyse India's government debt profile.
 The total liabilities of the Indian Union
Government saw a significant increase in the
year FY21 due to the COVID-19 pandemic. It
led to higher government borrowings to finance additional expenditure needs and a sharp contraction in the
GDP. However, the total liabilities moderated from 59.2% of GDP in FY21 to 56.7% in FY22.
 India's public debt profile is considered to be stable with low currency and interest rate risks. Because the
debt portfolio is mostly contracted at fixed interest rates (with floating internal debt constituting only 1.7
percent of GDP in end-March 2021) and has a low interest rate risk.
 The majority of the Union Government's total net liabilities in March 2021 were denominated in domestic
currency (Internal Liability-95.1%) and only 4.9% in sovereign external debt (External Liability), reducing
currency risk.

VAJIRAM AND RAVI Economic Survey 2022-23 Page 20