SDG 16: Peace, Justice & Strong Institutions | SDG 17: Partnerships for the Goals
Institutions: Ministry of Finance | Ministry of Statistics & Programme Implementation
The Comptroller and Auditor General (CAG) has released its first-of-its-kind publication State Finances 2022-23, providing a decadal analysis (2013-14 to 2022-23) of fiscal parameters across all 28 states. The report presents consolidated audited data on receipts, expenditure, liabilities, and fiscal responsibility indicators, filling a long-standing gap in inter-state and inter-temporal fiscal transparency.
A major finding is the sharp rise in public debt, which has more than tripled in ten years, from ₹17.57 lakh crore in 2013-14 to ₹59.60 lakh crore in 2022-23; amounting to around 23% of the combined GSDP. Total liabilities stood even higher at 28% of GSDP, with wide disparities: over 45% in Punjab versus below 15% in Odisha. Fiscal stress is also evident in deficits: all 28 states reported a fiscal deficit in 2022-23, ranging from 0.76% of GSDP (Gujarat) to 6.46% (Himachal Pradesh). While 16 states achieved revenue surplus, 12 recorded revenue deficits, together amounting to ₹2.23 lakh crore.
The sharpest increase came between 2020-21 and 2022-23, driven by back-to-back loans from the Centre to offset GST compensation shortfalls (₹2.69 lakh crore) and special assistance loans for capital expenditure (₹1.07 lakh crore). The COVID-19-induced contraction in GSDP in 2020-21 further worsened debt ratios, pushing debt-to-GSDP temporarily to 25%. Debt dependence is also structural: public debt averaged 150% of states’ revenue receipts, reflecting borrowing to fund even day-to-day expenditure.
The report also documents significant variations in revenue mobilization: Haryana, Maharashtra, Telangana, Karnataka, Gujarat, Tamil Nadu, and Kerala derived more than 50% of their revenue from own taxes, whereas several North-Eastern states, Bihar, and Himachal Pradesh depended heavily on central transfers. Expenditure patterns remain skewed, with 85% on revenue and only 15% on capital outlay, and nearly 44% of revenue expenditure locked in committed costs (salaries, pensions, interest).
This dataset highlights both the opportunities and vulnerabilities in India’s federal fiscal architecture. It underscores the urgent need for credible debt management frameworks, enhanced state-level revenue mobilization, and rebalancing towards productive capital expenditure.
Key Fiscal Terms Explained (From the CAG State Finances Report 2022-23)
GSDP: Gross State Domestic Product – the total value of goods and services produced in a state. Used to measure debt/deficit as a % of state economy.
Revenue Expenditure: Day-to-day government spending (salaries, pensions, subsidies, interest). Keeps the system running but does not create assets.
Capital Expenditure (Capex): Investment spending on long-term assets like roads, irrigation, power plants. Drives growth and productivity.
Fiscal Deficit: The gap between total expenditure and total revenue (excluding borrowings). Shows how much the state must borrow.
Revenue Surplus / Deficit: Surplus = revenue receipts > revenue expenditure (fiscal healthier).
Deficit = revenue receipts < revenue expenditure (cannot cover basics).Committed Expenditure: Mandatory spending (salaries, pensions, interest). Eats into flexibility for new schemes.
Public Debt: Outstanding borrowings of the state (market loans + central loans).
Total Liabilities: Public debt + other obligations (e.g., provident funds, reserves, deposits). Broader than debt alone.
Outlay: Budgeted allocation for expenditure (both revenue and capital).
Follow the full report here: CAG State Finances Report 2025 (PDF)