<h1>Union Cabinet Approves 14th Finance Commission's Fiscal Deficit Flexibility for States, Enhancing Capital Expenditure Capacity.</h1> The Union Cabinet approved the 14th Finance Commission's recommendations on fiscal deficit targets and additional fiscal deficits for states during 2015-2020. States can maintain a fiscal deficit up to 3% of their Gross State Domestic Product (GSDP), with an additional 0.5% allowed if they meet specific debt and revenue criteria. This flexibility is contingent on having no revenue deficit in the current and preceding years. States can carry forward unused fiscal deficit capacity within the award period, but excess borrowings will be offset against future borrowing limits. The decision does not impact the central government's finances but allows states to increase capital expenditure.