The pandemic-hit states are staring at a record 36 per cent jump in their indebtedness to Rs 68 lakh crore, which will be a decadal high this financial year as their revenue is seen plunging 15 per cent, according to a report.

This will have their economic output shrinking by at least 2-4 per cent this financial year, Crisil said in the report on Tuesday.

This is mainly attributable to the falling goods and services tax (GST) collections and sticky revenue expenditure of the states that has gone up massively after the lockdowns, which began in late-March, the report said.

The report is based on the state of finances of the top-18 states, including Goa and excluding Delhi, which account for 90 per cent of the aggregate gross state domestic product (GSDP).

The states are set to face a revenue deficit of 6 per cent this fiscal, up from 1.5 per cent last year, it said. Capital outlay will fall to 2.7 per cent from 3.8 per cent, increasing their gross fiscal deficit to 8.7 per cent from 5.3 per cent in 2019-20 and total debt to Rs 68 lakh crore from Rs 58 lakh crore in 2019-20.

Crisil director Ankit Hakhu said the overall debt of the states, including guarantees and loans provided by the Centre to partly compensate for the GST shortfall, will increase sharply by Rs 10 lakh crore this year.

Manish Gupta, a senior director at the agency, said amid falling revenue receipts, the states’ revenue expenditure would remain sticky.