On an aggregate basis, states’ gross borrowings are budgeted to rise to ` 5.5 lakh crore or 2.9 per cent of GDP, while net borrowings are expected to rise to ` 4.2 lakh crore or 2.3 per cent of GDP in 2018-19.
States have budgeted to finance nearly 91 per cent of their fiscal deficit through market borrowings as against around 66 per cent by the central government. Gross borrowings 2  by State Governments are projected to increase 28.5 per cent year-on-year (y-o-y) during 2018-19.  Financing Mix has changed: The changes in financing mix of states also contributed to increased reliance on market borrowings.