II Fiscal Position of the

State Governments

1. Introduction 7 provides an overview of their debt position,

2.1 The improvement in State finances including contingent liabilities. Section 8 sets out
achieved in 2021-22 was sustained in 2022-23 by some concluding observations.
containing gross fiscal deficits (GFDs) within the 2. Key Fiscal Indicators
budget estimates (BE) for the second consecutive
2.3 States’ consolidated gross fiscal deficit
year. This consolidation was achieved mainly
to gross domestic product (GFD-GDP) ratio
through reduction in revenue deficits, even as
declined from 4.1 per cent in 2020-21 to 2.8 per
capital outlays remained strong. Budget estimates
cent in 2021-22, led by a moderation in revenue
indicate that prudent fiscal management is also
envisaged for 2023-24, with near elimination of expenditure, coupled with an increase in revenue
revenue deficits. collection (Table II.1).

2.2 The rest of this chapter is divided into 2.4 As per the provisional accounts (PA)
seven sections. Section 2 highlights key fiscal available from the Comptroller and Auditor
indicators of States. Sections 3 and 4 focus General of India (CAG), States GFD-GDP ratio
on their revenue and expenditure patterns, at 2.8 per cent in 2022-23 was below the budget
respectively. Section 5 discusses actual fiscal estimate of 3.2 per cent and the Centre’s limit of
outcomes during 2023-24 so far and the outlook 4 per cent (Chart II.1a and b). While there was a
for the rest of the year. Section 6 details financing sharp decline in the revenue deficit, the primary
of the consolidated fiscal deficit of States. Section deficit remained sizeable.

Table II.1: Major Deficit Indicators - All States and Union Territories with Legislature
(` lakh crore)

Item 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2022-23 2022-23 2023-24
(BE) (RE) (PA) (BE)
1 2 3 4 5 6 7 8 9 10
Gross Fiscal Deficit 4.10 4.63 5.25 8.05 6.55 8.83 9.24 7.53 9.48
(Per cent of GDP) (2.4) (2.4) (2.6) (4.1) (2.8) (3.2) (3.4) (2.8) (3.1)
Revenue Deficit 0.19 0.18 1.21 3.71 1.02 0.84 1.25 0.80 0.35
(Per cent of GDP) (0.1) (0.1) (0.6) (1.9) (0.4) (0.3) (0.5) (0.3) (0.1)
Primary Deficit 1.17 1.44 1.73 4.18 2.27 4.12 4.51 3.35 4.29
(Per cent of GDP) (0.7) (0.8) (0.9) (2.1) (1.0) (1.5) (1.7) (1.2) (1.4)

BE: Budget Estimates. RE: Revised Estimates. PA: Provisional Accounts.

Sources: Budget documents of State governments; and Comptroller and Auditor General of India (CAG).

3
 State Finances : A Study of Budgets of 2023-24

Chart II.1: Key Fiscal Indicators

a. Fiscal Indicators b: Gross Fiscal Deficit: Centre’s Limit, BE and Actual

Sources: Budget documents of State governments; and CAG.

2.5 States have budgeted a GFD-GDP ratio of level, 19 States and UTs have budgeted a GFD-
3.1 per cent in 2023-24, below the Centre’s limit GSDP ratio exceeding the FRL1 limit of 3 per cent
of 3.5 per cent for the year. At a disaggregated (Chart II.2; Annex I.1).

Chart II.2: States’ GFD-GSDP Ratios and FRL Limit in 2023-24

Source: Budget documents of State governments.

1
Fiscal Responsibility Legislation (FRL) threshold for States’ GFD is 3 per cent of GSDP.

4
 Fiscal Position of State Governments

3. Receipts
Chart II.3: Change in Own-Tax Revenue in 2021-22
2.6 During 2021-22, States’ revenue receipts
increased sharply, following the relaxation of
lockdown measures and the rebound in economic
activity (Table II.2). The surge in revenue
collections was driven by increase in tax revenue
- both own taxes and tax devolution - as well as
non-tax revenue, offsetting reduced grants from
the Centre.

2.7 Within own tax revenue, stamp duty and

registration fees, sales tax, and State Goods and
Services Tax (SGST) contributed positively to
revenue increment (Chart II.3). The strong growth
in SGST has been instrumental in reducing the Sources: Budget documents of State governments.

vertical fiscal imbalance between the Centre and

the States in recent years (Box II.1). In contrast, existing mining leases and auction of new mines.
States witnessed a fall in revenue from excise Within the category of Finance Commission
duties and taxes and duties related to electricity. grants, only post-devolution revenue deficit grants
Higher non-tax revenue resulted from renewal of witnessed an increase.

Table II.2: Aggregate Receipts of State Governments and UTs

(` lakh crore)
Item 2018-19 2019-20 2020-21 2021-22 2022-23 (RE) 2022-23 (PA) 2023-24 (BE)
1 2 3 4 5 6 7 8

1. Revenue Receipts (a+b) 26.20 26.70 25.87 32.25 39.12 36.04 43.09
(13.9) (13.3) (13.0) (13.7) (14.4) (13.2) (14.3)
a. States’ Own Revenue (i+ii) 14.34 14.85 13.48 17.19 20.86 - 24.79
(7.6) (7.4) (6.8) (7.3) (7.7) - (8.2)
i. States’ Own Tax 12.15 12.24 11.72 14.73 18.02 - 21.23
(6.4) (6.1) (5.9) (6.3) (6.6) - (7.0)
ii. States’ Own Non-Tax 2.19 2.61 1.76 2.47 2.84 2.78 3.56
(1.2) (1.3) (0.9) (1.1) (1.0) (1.0) (1.2)
b. Central Transfers (i+ii) 11.87 11.85 12.39 15.06 18.26 - 18.30
(6.3) (5.9) (6.2) (6.4) (6.7) - (6.1)
i. Shareable Taxes 7.47 6.51 5.95 8.83 9.48 - 10.24
(4.0) (3.2) (3.0) (3.8) (3.5) - (3.4)
ii. Grants-in Aid 4.40 5.35 6.44 6.23 8.78 6.57 8.06
(2.3) (2.7) (3.2) (2.7) (3.2) (2.4) (2.7)
2. Non-Debt Capital Receipts (i+ii) 0.42 0.57 0.23 0.22 0.14 0.09 0.43
(0.2) (0.3) (0.1) (0.1) (0.1) (0.0) (0.1)
i. Recovery of Loans and Advances 0.41 0.57 0.13 0.20 0.11 0.09 0.20
(0.2) (0.3) (0.1) (0.1) (0.1) (0.0) (0.1)
ii. Miscellaneous Capital Receipts 0.01 0.00 0.10 0.02 0.03 0.00 0.24
(0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.1)

RE: Revised Estimates. PA: Provisional Accounts. BE: Budget Estimates.

Note: 1. Figures in parentheses are per cent of GDP.
2. -: not available.
Source: Budget documents of State governments; and CAG.

5
 State Finances : A Study of Budgets of 2023-24

Box II.1:
Vertical Fiscal Imbalance in India - Changing Dynamics
Vertical fiscal imbalance (VFI) - the fiscal gap arising due which used to be their major source of indirect tax before
to the disparity between the revenue generation capacities GST. Following Eyraud and Lusinyan (2013), the VFI is
and expenditure responsibilities across different tiers of calculated as the share of sub-national own spending2 not
government within a federation - impacts government debt financed through own revenues3.
and deficits (Aldasoro and Seiferling, 2014; Koley and
Mandal, 2019). During periods of increasing imbalances,
subnational governments resort to excessive borrowings
The results indicate that there was no major increase in VFI
or neglect the quality of expenditure (Rodden, 2003). It
after the implementation of GST in 2017-18. The VFI moved
also has a negative effect on gross dometic product (GDP)
in a narrow range of 0.48-0.51 during 2017-18 to 2019-20.
(Eyruad and Lusiyan, 2013).
While there was a spike in VFI in the COVID year (2020-21)
In India, VFI finds its roots in the asymmetry of revenue- due to the widening of gap between the State governments’
raising authority vested in different tiers of government by own revenue and expenditure, it has declined steadily in
the Constitution, with the Centre authorised to levy major the last two years although there are wide variations across
taxes while States have higher spending responsibilities States (Charts II.1.1a and II.1.1b). The improvement in the
(Kelkar, 2019). The Constitution of India empowered the VFI at the aggregate level can be attributed to an increase in
Finance Commissions to suggest transfer of resources from own revenue collections by States through SGST which has
the upper tiers of government to the lower ones to address witnessed a sharp rebound since 2021-22. Thus, contrary
this imbalance. The implementation of the Goods and to expectations, the introduction of GST has reduced the
Services Tax (GST) could have further impacted VFI, with VFI between the Centre and the States thereby upholding
the States losing control over the value added tax (VAT) the spirit of fiscal federalism in India.

Chart II.1.1a: Trend in Vertical Fiscal Imbalance Chart II.1.1b: Statewise VFI in 2022-23 (PA)

Notes: Data pertain to All States and UTs. Data for 2022-23 (PA) have been
compiled from CAG. For States whose PA data were not available, RE
numbers were used. Sources: State Finances: A Study of Budgets;
Sources: State Finances: A Study of Budgets; CAG; and RBI staff estimates. CAG; and RBI staff estimates.

(Contd...)

2
States’ Own Expenditure excludes expenditure financed from Union government grants. Grants towards State Plan Schemes, Central Plan
Schemes and Centrally Sponsored Schemes are excluded. Finance Commission Grants have been included.
3
States Own Revenue includes tax and non-tax revenues excluding share in central taxes, grants and borrowings. States’ own tax revenue
include Taxes on Income, property and capital transactions and taxes on commodities and services of which a major component is SGST.
Likewise, States’ own Non-Tax Revenues include receipts from interest, dividend and profits, general services, social services, fiscal
services and economic services

6
 Fiscal Position of State Governments

References
Aldasoro, I., and Seiferling, M. M. (2014). “Vertical Fiscal Imbalances and the Accumulation of Government Debt”. International
Monetary Fund Working Paper 14/29.
Eyraud, L., and Lusinyan, L. (2013). “Vertical fiscal imbalances and fiscal performance in advanced economics”. Journal of
Monetary Economics, 60(5), 571-587.
Kelkar, V. (2019). “Towards India’s new fiscal federalism”. Journal of Quantitative Economics, 17, 237-248.
Koley, M., and Mandal, K. (2019). “Vertical fiscal imbalances and its impact on fiscal performance: A case for Indian states”.
Opportunities and Challenges in Development: Essays for Sarmila Banerjee, 243-282.
Rodden, J. (2003). “Reviving leviathan: fiscal federalism and the growth of government”. International organization, 57(4), 695-729.

2.8 Provisional accounts indicate that States’ to rise on account of higher collections from
revenue receipts (as a per cent of GDP) fell in renewal of existing mining leases and auction of
2022-23 due to lower tax revenues and grants from mines, reforms in power sector, as well as from
the Centre (Table II.2). For 2023-24, States have interest earnings and general services. States
budgeted a sharp rise in revenue receipts over need to improve forecast accuracy of revenue
2022-23 (PA), anticipating a broad-based recovery estimates, including tax buoyancy, for better fiscal
in all major components (Table II.2). SGST, sales management (Box II.2).
tax and States’ excise duties constitute around 79 2.9 Several State governments are
per cent of the States’ own tax revenue collection implementing measures to augment their
(Chart II.4a). The States have budgeted for an revenues. For instance, Kerala and Karnataka
acceleration in the growth of sales tax and State are aiming to reduce disparities between property
excise duty collections. In contrast, the growth guidance values and market values to increase
in SGST is projected to moderate from a high tax collection from registration and stamp
base (Chart II.4b). Non-tax revenue is budgeted duties. Himachal Pradesh’s Sadbhavna Yojana

Chart II.4: Own Tax Revenue

a. Composition (5-year average share) b. Growth in Select Components

Sources: Budget documents of State governments; and CAG.

7
 State Finances : A Study of Budgets of 2023-24

Box II.2:
States’ Own Tax Revenue Buoyancy - Forecasts versus Realisation
Robust forecasting of tax buoyancy, a measure of
Chart II.2.1: States’ Own Tax Revenue Buoyancy
responsiveness of tax revenue to changes in economic
activity, is essential for effective budget execution and
resource allocation. Large disparities between predicted
and actual tax buoyancy can result in inefficient
macroeconomic outcomes. For instance, a lower realised
revenue relative to estimates would require unforeseen
deficit financing, while excess of revenue over the
estimates can result in underutilisation of resources and
output losses.
To examine the forecasting performance of States’
own tax revenue buoyancy, the budgeted and realised
buoyancies are calculated with data from 2016-17 to
2022-23 for 13 major States4. The average budgeted Note: Based on data for 13 States.
Source: RBI staff estimates.
buoyancy for the entire sample is 0.74, while the realised
buoyancy is lower at 0.55. As the sample period includes
two large exogeneous shocks – COVID-19 and Russia- in place appropriate mechanisms to strengthen their
Ukraine conflict - the analysis is also undertaken for forecasting capacity for own revenues for an efficient and
two sub-periods –2016-17 to 2019-20 and the period of optimal use of their budgetary resources.
elevated uncertainty (2020-21 to 2022-23). During the Table II.2.1: Forecast Errors
first period (2016-20), the budgeted tax buoyancy was
Sample Period Mean Mean Root Mean U Theil
0.89 (close to unity), while during the period of uncertainty Error Absolute Error Square Error Statistic
it declined sharply to 0.52. In both cases, however, the
Full Sample -0.18 1.09 1.35 0.56
realized buoyancy was lower vis-à-vis the forecasts (Chart
2016-17 to 2019-20 -0.18 0.94 1.14 0.46
II.2.1). Forecast errors (actual buoyancy minus budgeted
2020-21 to 2022-23 -0.19 1.33 1.48 0.67
buoyancy) rose during periods of uncertainty (Table II.2.1).
In view of this evidence, States would benefit from putting Source: RBI staff estimates.

addresses pending cases under different tax Acts. to boost tax collections. In order to augment non-
Maharashtra and Rajasthan are contemplating tax revenues, Kerala is revising mineral royalties.
continuation of amnesty programs to resolve
4. Expenditure
pending cases, which in turn is expected to
unlock tax arrears receivables. States are also Revenue Expenditure
introducing cesses to generate additional revenue. 2.10 States’ revenue expenditure (as a per cent
The examples are Kerala’s Social Security cess
of GDP) declined in 2021-22 from the pandemic
on Indian Made Foreign Liquor (IMFL) and fuel
peak of 2020-21, reflecting fiscal consolidation
sales, Goa’s Green cess on non-Goan vehicles,
efforts and reduced needs for COVID-19 related
and Himachal Pradesh’s water and milk cess.
spending (Table II.3).
Delhi will also set up a dedicated Tax Policy
and Revenue Augmentation Unit which will use 2.11 Under development expenditure, the
advanced technologies, including data analytics, allocations for education, sports, art and culture,

4
The 13 States include Andhra Pradesh, Bihar, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan,
Tamil Nadu, Telangana and Uttar Pradesh.

8
 Fiscal Position of State Governments

Table II.3: Expenditure Pattern of State Governments and UTs

(` lakh crore)

Item 2018-19 2019-20 2020-21 2021-22 2022-23 (RE) 2022-23 (PA) 2023-24 (BE)
1 2 3 4 5 6 7 8
Aggregate Expenditure (1+2 or 3+4+5) 31.25 32.52 34.15 39.02 48.50 43.66 53.01
(16.5) (16.2) (17.2) (16.6) (17.8) (16.0) (17.6)
1. Revenue Expenditure 26.38 27.92 29.58 33.27 40.38 36.84 43.44
of which: (14.0) (13.9) (14.9) (14.2) (14.8) (13.5) (14.4)
Interest Payments 3.19 3.51 3.87 4.27 4.72 4.19 5.19
(1.7) (1.8) (2.0) (1.8) (1.7) (1.5) (1.7)
2. Capital Expenditure 4.87 4.60 4.57 5.75 8.12 6.82 9.57
of which: (2.6) (2.3) (2.3) (2.4) (3.0) (2.5) (3.2)
Capital Outlay 4.40 4.18 4.14 5.32 7.32 6.08 8.68
(2.3) (2.1) (2.1) (2.3) (2.7) (2.2) (2.9)
3. Development Expenditure 21.01 21.63 22.64 25.99 33.22 - 36.02
(11.1) (10.8) (11.4) (11.1) (12.2) - (11.9)
4. Non-Development Expenditure 9.44 10.05 10.64 12.04 14.13 - 15.71
(5.0) (5.0) (5.4) (5.1) (5.2) - (5.2)
5. Others* 0.80 0.83 0.89 0.99 1.15 - 1.28
(0.4) (0.4) (0.4) (0.4) (0.4) - (0.4)

RE: Revised Estimates. PA: Provisional Accounts. BE: Budget Estimates.

*: Includes grants-in-aid and contributions including compensation and assignments to local bodies.
Notes: 1. Figures in parentheses are per cent of GDP.
2. Capital expenditure includes capital outlay and loans and advances by the State governments.
3. -: not available.
Source: Budget documents of State governments.

relief on account of natural calamities, urban the latter reflecting States’ response to the
development, agriculture and allied activities, second wave of COVID-19. The decline in non-
and rural development were reduced (Chart developmental expenditure was largely broad-
II.5a). On the other hand, spending on the power based (Chart II.5b).
sector and medical and public health increased, 2.12 While revised estimates for 2022-23
suggest higher revenue expenditure by States
Chart II.5: Revenue Expenditure: Increment in 2021-22 over 2020-21

a. Development Expenditure b. Non-Developmental Expenditure

Source: Budget documents of State governments.

9
 State Finances : A Study of Budgets of 2023-24

Chart II.6: Social Sector and Committed Expenditure

a. Social Sector Expenditure b. Committed Expenditure

Source: Budget documents of State governments.

as per cent of GDP, provisional data5 indicate agriculture and allied activities, particularly food
sharp moderation in spending (Table II.3). In storage, and warehousing (Chart II.7). Services
2023-24, the revenue expenditure of the States
Chart II.7: Increment in Capital Outlays during 2021-22
is budgeted at 14.4 per cent of GDP with social
sector expenditure6 at 8.0 per cent of GDP (Chart
II.6a). Committed expenditure, which includes
interest payments, administrative services and
pensions, declined marginally to 4.5 per cent of
GDP in 2022-23 and is expected to remain at the
same level in 2023-24 (BE) (Chart II.6b).
Capital Expenditure
2.13 Capital outlay7 of States recorded a robust
growth of 28.7 per cent in 2021-22. Strong growth
in tax and non-tax revenues and the advancement
of payment by the Centre for tax devolution and
GST compensation provided the necessary
Source: Budget documents of State governments.
fiscal space to accelerate capital outlay towards

5
Analysis on provisional estimates is limited to aggregate level as disaggregate data are not available from CAG and is not comparable
with the revised estimates.
6
Include expenditure on social services, rural development and food, storage and warehousing under revenue expenditure, capital outlay
and loans and advances by the State government.
7
Capital expenditure includes capital outlay and loans and advances by the State governments. Since the share of loans and advances by
States is less than 10 per cent and is a volatile item, only capital outlay is analysed here.

10
 Fiscal Position of State Governments

related to water supply and sanitation, urban

Chart II.8: Research and Development Expenditure -
development and energy and transport sectors Component-wise
also received higher allocations. As per the
provisional accounts, capital outlay of the States
increased by 14.3 per cent in 2022-23. Excluding
central transfers of ₹0.81 lakh crore under the
Scheme for Special Assistance to States for
Capital Investment, capital outlay of the States in
2022-23 (PA) at 1.9 per cent of GDP would have
been much lower than 2.3 per cent in 2021-22.
2.14 After a subdued outturn in 2022-23, the
capital outlay of the States is budgeted to increase
sharply by 42.6 per cent in 2023-24 to 2.9 per cent
of GDP. To incentivise States to undertake higher
capital expenditure in 2023-24, the Centre has
extended the Scheme for Special Assistance to Source: State governments.
States for Capital Investment with an enhanced
loan allocation of ₹1.3 lakh crore (an increase of spending has increased, while spending on
30 per cent over a year ago). agricultural research has declined (Chart II.8).
Expenditure on Research and Development
2.16 The overall expenditure quality of the
2.15 Available data for 10 States and UTs 8
States has improved in the post-pandemic period.
suggest that their consolidated expenditure on The ratio of revenue expenditure to capital outlay
research and development (R&D) rose marginally (RECO) of the States is budgeted to fall to 5.0 in
from 0.07 per cent of their combined GSDP in 2023-24 from 6.0 in 2022-23 (PA). Moreover, the
2020-21 to 0.10 per cent in 2022-23 (RE), albeit
Centre and the States are gradually modernising
with wide spatial variations (Annex I.2). These
their banking arrangements, cash management
States have budgeted R&D expenditure at 0.09
per cent of GSDP for 2023-24. These expenditures practices and funds transfer mechanisms through
are primarily dominated by medical, health, family adoption of a Single Nodal Agency (SNA) system
welfare, sanitation and agricultural research. which would strengthen the public funds disbursal
Over time, the proportion of health-related R&D system in India (Box II.3).

Box II.3:
Streamlining Fund Transfers for Efficient Governance - Government’s Cash Management Reforms
Efficient banking arrangements and cash management management practices, with idle cash balance held by
practices are essential for an effective utilisation of some agencies while other agencies facing payment
government’s financial resources and timely execution of difficulties due to shortage of funds. To fund these cash
payment obligations. Fragmented banking arrangements deficient agencies, the governments resort to short-term
- multiple accounts maintained by numerous revenue borrowings incurring additional interest burden in the
collecting and spending agencies (including autonomous process.
and statutory bodies) - can result in inefficient cash (Contd...)

8
The States/UTs are Bihar, Haryana, Jammu & Kashmir, Karnataka, Odisha, Puducherry, Rajasthan, Sikkim, Tamil Nadu and West Bengal.

11
 State Finances : A Study of Budgets of 2023-24

The Expenditure Management Commission (2015) had the Centre. More than 200 ABs receive funds through this
recommended that to minimise borrowing costs and route (Yadav, 2022).
to enhance efficiency in fund flows, the government
Central Nodal Agency (CNA) System for Central Sector
should gradually bring autonomous bodies (ABs) under
(CS) Schemes
a consolidated framework of government bank accounts.
Such a system, known as Treasury Single Account (TSA), The CS schemes are 100 per cent funded by the Union
helps to establish comprehensive oversight and centralised government and implemented by the Central Government
control over government’s financial resources and an machinery. For CS schemes with annual outlays exceeding
efficient use of these resources. An effective TSA system ₹500 crore, the Centre has made it mandatory that fund
is founded on three key principles: (i) unified banking transfer should be through the TSA model. Under this, the
arrangement to promote consolidation of government concerned Ministry designates an agency as the Central
funds and enable real-time tracking of cash resources; (ii) Nodal Agency (CNA) for each scheme, with other agencies
exclusive treasury oversight, i.e., no government agency down the ladder as sub-agencies of the CNA. Each CNA
other than the Finance Ministry should maintain bank and its sub-agencies open accounts directly with the
accounts independently; and (iii) comprehensive coverage Reserve Bank, which functions as the primary banker to the
for complete inclusion of cash balances from all government Ministry without the involvement of any agency bank. These
entities to provide a holistic view of the government’s cash accounts with the Reserve Bank are assignment accounts
position (IMF, 2011). In India, the TSA system has been wherein an upper limit on expenditure is preassigned.
adopted in a phased manner, beginning with autonomous Unutilised assignments lapse to the Centre at the close of
bodies and the States and implementing agencies receiving the fiscal year and hence are not available to the CNA in the
funds under the Central Sector and Centrally Sponsored next year. During 2022-23, ₹2.75 lakh crore was allocated
Schemes (Chart 1). to schemes being implemented through the CNA route
(Yadav, 2022). In the earlier system, this amount would have
Treasury Single Account (TSA) System for Autonomous
moved out of the Centre’s account at the Reserve Bank
Bodies
at the beginning of the fiscal year. For CS Schemes with
In the first step, various ABs were brought under the TSA annual outlays of less than ₹500 crore or schemes being
system. A TSA for ABs is an assignment bank account implemented by the agencies of the State governments, the
opened in the Reserve Bank to receive grants-in-aid from CNAs can open the central nodal account in a commercial

Chart 1: Revised Flow of Funds from the Centre

(Contd...)

12
 Fiscal Position of State Governments

bank. Over time, these accounts are expected to migrate to new system through several ways. First, since expenditure
the Reserve Bank as well. on a CSS in a State is being made from a single account,
the submission of utilisation certificates has become easier.
Single Nodal Agency (SNA) Model for Centrally Sponsored
Second, by providing data on unspent balances, the
Schemes (CSS)
government can now see the State-wise float available for
The Centre has also notified a new procedure for release a CSS before initiating the proposal for the fund release.
of funds under the Centrally Sponsored Schemes (CSS) Third, the States can also monitor and prioritise the release
in which a certain percentage of the funding is borne by of new instalments of funds to districts, blocks, and gram
the States and the implementation responsibility also lies panchayats based on their utilisation of the previously
with the State Governments. Under the new procedure, allocated funds. Fourth, the States can now monitor the
known as the Single Nodal Agency (SNA) Model, each interest credited by the banks and can transfer the States’
State designates an SNA to implement a CSS which opens share into the consolidated fund of the State. Overall, the
a single nodal account at the State level with a commercial ability to see the transaction process end-to-end improves
bank. The implementing agencies down the ladder use the the efficiency of the delivery mechanism.
SNA’s account through zero balance subsidiary accounts, References
with predefined drawing limits. The Ministry releases the
Centre’s share for each CSS to States’ account with the RBI, Department of Expenditure OMs relating to SNA, CNA and
which transfers funds to the SNA’s account. Interest earned TSA: https://doe.gov.in/.
is remitted to respective governments on a pro-rata basis. GoI (2022). “Union finance minister Smt. Nirmala Sitharaman
Zero balance accounts have eliminated delays, enabling launches single nodal agency (SNA) dashboard as a part of
‘just in time’ payments. More than 3000 SNAs have been the azadi ka amrit mahotsav (AKAM) celebrations by ministry
onboarded and over eight lakh implementing agencies are of finance in New Delhi.” PIB press release dated June 7,
now part of this system (GoI, 2023a). 2022. Available at: https://pib.gov.in/PressReleseDetail.
For both CS Schemes and CSSs, funds are promptly aspx?PRID=1831876.
released from Central Ministries to CNA/SNA and the float GoI (2023a). “Annual Report 2022-23”, Ministry of Finance.
in the account is kept at a minimum. The Ministries release
only a quarter of the budgeted amount at a time, and the GoI, (2023b). “Compendium of instructions on the new
additional funds release is contingent upon utilisation of 75 procedure for release of funds under centrally sponsored
per cent of the earlier funds. End-year release is avoided to schemes”, Department of Expenditure, Ministry of Finance.
prevent accumulation of unspent balances with the CNAs/ IMF (2011). “Treasury Single Account: An Essential Tool for
SNAs (GoI, 2023b). Further, the SNA Dashboard launched Government Cash Management”. Prepared by Pattanayak
by the Centre in June 2022 provides comprehensive S. and Fainboim I. Fiscal Affairs Department. August.
and real time insights into release, expenditure, account
PFMS, Controller General of Accounts (CGA): https://pfms.
balance and interest earned for each account (GoI, 2022).
nic.in/.
The dashboard makes the system more transparent while
promoting data-driven and better-informed decision-making. Roychoudhury, A. (2022). “Govt saved Rs 10,000 crore
in interest costs in FY22, says Somanathan”. Business
This new system of cash management has reduced the
Standard, June 8.
number of accounts containing CSS funds from 18 lakh
to 3,300 (Yadav, 2022). Estimates suggest that the Centre Yadav, Sajjan S. (2022). “Financemin’s central nodal
has saved around ₹10,000 crore through SNA in 2022-23 agency model: Best value realisation of taxpayers’ money”.
(Roychoudhury, 2022). The States also benefit from this The Economic Times, December 3.

5. Actual Outcome in 2023-24 So Far and even as revenue expenditure growth moderated.
Outlook Within revenue receipts, growth in tax revenue and
2.17 During H1:2023-24, States’ consolidated non-tax revenue decelerated from a high base.
GFD remained higher on a year-on-year (y-o-y) Grants from the Centre contracted sharply with
basis, primarily due to lower growth in revenue the cessation of GST compensation cess (Chart
receipts and robust growth in capital expenditure, II.9a). SGST witnessed a robust y-o-y growth of

13
 State Finances : A Study of Budgets of 2023-24

Chart II.9: States’ Revenue Receipts during H1

a. Growth in States’ Revenue Collection b. Growth in Tax Components

Source: CAG.

19.7 per cent, benefitting from the improvement the ₹1.3 lakh crore budgeted for 2023-24) under
in GST compliance and resilient economic activity the scheme, out of which ₹58,494 crore has
(Chart II.9b). Tax devolution from the Centre was already been disbursed to the States9.
buoyant due to high growth in income tax and GST
collections and an increase in advance payment
Chart II.10: States’ Revenue Expenditure
of tax devolution of ₹1.18 lakh crore in June 2023 during H1
vis-a-vis the normal monthly devolution of ₹0.59
lakh crore.
2.18 States’ revenue expenditure growth
decelerated to 8.9 per cent in H1:2023-24 (Chart
II.10). A similar pattern was observed in revenue
expenditure minus interest payments.
2.19 Capital outlay increased by 52.6 per
cent during H1:2023-24, driven by support from
the Union Government’s Scheme for Special
Assistance to States for Capital Investment (Chart
II.11 a and b). By end-October, 2023 the Union
government had approved expenditure amounting
Source: CAG.
to ₹96,206 crore (accounting for 74.0 per cent of

9
Monthly Summary Report of Department of Expenditure for the month of October 2023.

14
 Fiscal Position of State Governments

Chart II.11: Growth in Capital Outlay during H1

a. Growth in Capital Outlay b. Growth in Capital Outlay by States

Source: CAG.

2.20 States’ fiscal outlook remains favourable deficit of States till 2016-17. Since then, States’
in view of the resilient domestic economic dependence on market borrowings has increased
activity as well as their consolidation efforts. On significantly following the recommendation of the
the revenue side, even though the growth in tax Fourteenth Finance Commission (FC-XIV) to
revenue during H1:2023-24 at 14.6 per cent is exclude States from the National Small Savings
marginally lower than the budgeted 17.9 per cent, Fund (NSSF) financing facility (barring Delhi,
it is expected to improve during H2:2023-24 due Madhya Pradesh, Kerala and Arunachal Pradesh).
to a favourable base and continued robust GST The reliance on net market borrowings rose to
collection. On the expenditure side, growth in more than 90 per cent in 2019-20. Thereafter, the
the revenue expenditure during the year so far States’ dependency on net market borrowing has
declined and that of loans from the Centre has
(H1:2023-24) at 8.9 per cent is much lower than
increased. During 2023-24, States have budgeted
the full year budget estimate of 18 per cent and
to finance 76 per cent of GFD through net market
provides space for undertaking higher capex,
borrowing.
while persevering with fiscal consolidation.
Market Borrowings
6. Financing of GFD and Market Borrowings by
State Governments and UTs 2.22 The gross market borrowings of States/
UTs increased by 8.1 per cent to ₹7.58 lakh crore
GFD Financing
during 2022-23 from ₹7.02 lakh crore a year ago.
2.21 On average, net market borrowings The amount borrowed by the States in March 2023
financed more than half of the consolidated fiscal was the highest in the last 5 years (Chart II.12).

15
 State Finances : A Study of Budgets of 2023-24

two years (Chart II.13a). The consolidated

Chart II.12: Gross Market Borrowings of States:
Month-wise actual borrowings of all States in 2022-23 were
24 per cent lower than the indicative calendar
(Chart II.13b). In 2023-24 (till October 19, 2023),
their gross market borrowings were 26.4 per
cent higher than in the corresponding period
of last year, partly due to the base effect (the
borrowings had contracted by 7.6 per cent during
corresponding period of the last year).
2.24 States’ net market borrowings increased
by 5.4 per cent to ₹5.19 lakh crore in 2022-23 from
₹4.92 lakh crore in 2021-22. This increase was
concentrated in a few States like Andhra Pradesh,
Gujarat, Himachal Pradesh, Madhya Pradesh
Haryana and Assam (Chart II.14).
Source: RBI.
2.25 There were 605 issuances in 2022-23,
of which 45 were re-issuances (7.4 per cent) as
2.23 Some States and UTs reduced their compared with 608 issuances in 2021-22 and 60
gross market borrowings in each of the last re-issuances (9.9 per cent). Madhya Pradesh,

Chart II.13: Gross Market Borrowings of States: State-wise and Indicative Calendar

a. Change in Gross Market Borrowing b. Actual vs Indicative Calendar

Source: RBI.

16
 Fiscal Position of State Governments

Chart II.14: State-wise Net Market Borrowings

Source: RBI.

Maharashtra, Puducherry, Punjab, Rajasthan, consolidation10. Out of 350 issuances undertaken

and Tamil Nadu undertook re-issuances during by States till October 19, 2023, 30 were
the year, in line with the policy of passive re-issuances (Table II.4).

Table II.4: Market Borrowings of State Governments

(` crore)

Item 2019-20 2020-21 2021-22 2022-23 2023-24*

1 2 3 4 5 6

1. Maturities during the year 1,47,067 1,47,039 2,09,143 2,39,562 2,89,918#

2. Gross sanction under Article 293(3) 7,12,744 9,69,525 8,95,166 880779 7,04,101
3. Gross amount raised during the year 6,34,521 7,98,816 7,01,626 758392 4,06,506
4. Net amount raised during the year 4,87,454 6,51,777 4,92,483 518830 2,68,070
5. Amount raised during the year to total Sanctions (per cent) 89 82 78 86 58
6. Weighted average yield of SGSs (per cent) 7.24 6.55 6.98 7.71 7.44
7. Weighted average spread over corresponding G-Sec (bps) 55 53 41 31 24
8. Average inter- state spread (bps)$ 6 10 4 3 2

*: As on October 19, 2023.

#: Data for maturity pertain to full year.
$: Based on the cut-off of 10 year fresh issuances.
Source: RBI.

10
Re-issuance of SGSs leads to augmenting the outstanding amount of a stock and may facilitate secondary market activity.

17
 State Finances : A Study of Budgets of 2023-24

2.26 The issuance of 10-year maturity securities

Table II.5: Maturity Profile of Outstanding
constituted 27.9 per cent of the total amount of
State Government Securities
(As at end-March 2023) issuances in 2022-23 as compared with 35.1 per
(Per cent) cent in the previous year. The rest 72.1 per cent
State/UT (Per cent of Total Amount was spread across maturities, ranging between
Outstanding)
2 and 35 years. Reflecting debt consolidation
less 1 to 5 to 10 to Above efforts, 55.1 per cent of the outstanding State
than 1Y 5Y 10Y 20Y 20Y
government securities (SGSs) was in the residual
1 2 3 4 5 6
maturity bucket of five years and above as at end-
Andhra Pradesh 4.1 29.3 28.5 38.1 -
March 2023 (Table II.5). Around 79 per cent of
Arunachal Pradesh 3.8 41.7 54.4 - -
Assam 3.0 41.1 55.9 - -
SGS are getting matured during next 10 years,
Bihar 9.5 47.8 42.7 - - implying higher rollover risk for State governments
Chhattisgarh 9.6 74.1 16.3 - - (Chart II.15a).
Goa 5.5 43.2 49.1 2.2 -
Gujarat 6.6 51.5 40.4 1.6 - 2.27 SGS yields traded with an upward bias
Haryana 8.1 39.0 32.8 20.1 - during 2022-23, reflecting, inter alia, the hike in
Himachal Pradesh 4.6 34.8 39.5 21.2 -
the policy repo rate by the Reserve Bank and the
Jammu and Kashmir 4.2 36.0 34.3 25.5 -
Jharkhand 5.8 44.4 35.0 14.8 -
hardening of the US bond yields (Chart II.15b).
Karnataka 5.3 38.5 35.4 20.8 - Overall, the weighted average cut-off yield (WAY)
Kerala 7.9 40.9 24.7 17.1 9.3 of SGS issuances rose during 2022-23 to 7.71
Madhya Pradesh 6.0 38.3 27.7 26.4 1.5
per cent from 6.98 per cent in the previous year.
Maharashtra 7.2 41.1 49.1 2.6 -
Manipur 3.7 33.6 55.7 7.1 -
The weighted average spread (WAS) of SGS
Meghalaya 4.0 54.5 35.4 6.1 - issuances over Central government securities
Mizoram 5.0 21.1 45.7 28.2 - of comparable maturity moderated to 31 bps in
Nagaland 4.7 40.1 55.2 - -
2022-23 from 41 bps in the previous year.
Odisha 22.1 38.0 25.6 14.2 -
Puducherry 7.5 44.8 37.5 10.2 - Financial Accommodation to States
Punjab 6.0 30.9 24.9 35.2 3.0
Rajasthan 7.2 46.1 33.0 9.3 4.4 2.28 As recommended by the Advisory
Sikkim 2.4 41.6 56.0 - 0.0 Committee on Ways and Means Advances
Tamil Nādu 6.9 38.5 28.6 9.7 16.4
(WMA) to State Governments, 2021 (Chairman:
Telangana 3.6 26.5 11.5 37.5 21.0
Tripura 5.5 43.6 36.0 15.0 -
Shri Sudhir Shrivastava), effective from April 1,
Uttar Pradesh 2.6 41.1 48.9 7.5 - 2022, the WMA limit for State governments/UTs
Uttarakhand 5.6 55.0 39.4 - - was fixed at ₹47,010 crore. State governments/
West Bengal 4.9 30.4 27.4 36.9 0.4
UTs can avail overdraft (OD) on 14 consecutive
All States and UTs 5.9 39.1 34.1 17.1 3.9 days and can be in OD for a maximum number of
-: Nil. 36 days in a quarter. During 2022-23, 17 States/
Source: RBI.
UTs availed Special Drawing Facility (SDF)11, 12

11
SDF is collateralised borrowing availed by States at concessional rate against their investment in government securities for meeting short
term mismatches.

18
 Fiscal Position of State Governments

Chart II.15: SGSs – Maturity and Yield Spread

a. Maturity Profiles of SGSs b. Movement of SGS Yields and Spreads

Source: RBI.

States/UTs resorted to WMA and 11 States/UTs practices. States’ surplus cash balances declined
availed OD. during 2022-23 as against a sustained increase in
Cash Management of State Governments 2020-21 and 2021-22 (Table II.6). As on October
18, 2023 States’ consolidated investment in ITBs
2.29 In recent years, States have been and ATBs fell to ₹2.03 lakh crore from ₹2.72 lakh
accumulating sizeable cash surpluses in
crore as at end-March 2023.
intermediate treasury bills (ITBs) and auction
treasury bills (ATBs). Although positive cash States’ Reserve Funds
balances indicate low intra-year fiscal pressure, 2.30 Given the increasing borrowing
they involve a negative carry of interest rates, requirements of States and mounting contingent
warranting improvement in cash management liabilities, they maintain the Consolidated Sinking
Fund (CSF) and the Guarantee Redemption
Table II.6: Investment of Surplus Cash Fund (GRF) with the Reserve Bank as a buffer
Balance of State Governments/UTs for repayment of future liabilities. States can also
(Outstanding as on March 31) avail SDF at a discounted rate from the Reserve
(` crore)
Bank against incremental funds invested in CSF
Item 2020 2021 2022 2023 2023* and GRF. So far, 24 States and one UT, i.e.,
1 2 3 4 5 6 Puducherry, have set up CSF and 19 States are
14-Day (ITBs) 1,54,757 2,05,230 2,16,272 2,12,758 1,08,397 members of the GRF (Table II.7). Outstanding
ATBs 33,504 41,293 87,400 58,913 95,013 investments in CSF and GRF stood at ₹1.8 lakh
Total 1,88,261 2,46,523 3,03,672 2,71,671 2,03,410
crore and ₹10,839 crore, respectively, at end-
*As on October 18, 2023. March 2023, as against ₹1.5 lakh crore and ₹9,399
Source: RBI.
crore, respectively, at end-March 2022.

19
 State Finances : A Study of Budgets of 2023-24

Table II.7: Investment in CSF/GRF by States Table II.8: Outstanding Liabilities of State
(As on March 31, 2023) Governments and UTs
(` crore)
Year Amount Annual Debt /GDP
State/UT CSF GRF CSF as per cent Growth
of Outstanding
(End-March) (` lakh (Per cent)
Liabilities
crore)
1 2 3 4
1 2 3 4
Andhra Pradesh 10,143 996 2.4
Arunachal Pradesh 2,260 4 12.0 2014 25.10 11.8 22.3
Assam 5,150 78 4.1 2015 27.43 9.3 22.0
Bihar 8,164 - 2.8 2016 32.59 18.8 23.7
Chhattisgarh 6,447 - 5.9 2017 38.59 18.4 25.1
Goa 833 401 2.7 2018 42.92 11.2 25.1
Gujarat 9,790 585 2.3 2019 47.87 11.5 25.3
Haryana 1,787 1,486 0.6 2020 53.51 11.8 26.6
Himachal Pradesh - - - 2021 61.55 15.0 31.0
Jammu & Kashmir UT - - - 2022 68.76 11.7 29.3
Jharkhand 1,053 - 0.9 2023 (RE) 74.96 9.0 27.5
Karnataka 14,217 313 2.7 2024 (BE) 83.32 11.2 27.6
Kerala 2,613 - 0.7
RE: Revised Estimates. BE: Budget Estimates.
Madhya Pradesh - 1,119 -
Sources: 1. Budget documents of State governments.
Maharashtra 58,404 1,230 8.9
2. Combined finance and revenue accounts of the Union
Manipur 61 123 0.4 and the State governments in India, Comptroller and
Meghalaya 1,032 82 5.5 Auditor General (CAG) of India.
Mizoram 372 66 2.9 3. Ministry of Finance, Government of India.
Nagaland 1,562 41 9.1 4. Reserve Bank of India.
Odisha 15,914 1,789 12.3 5. Finance accounts of the Union government,
Government of India.
Puducherry 473 - 3.8
Punjab 6,437 0 2.0
Rajasthan - - -
Tamil Nadu 8,173 - 1.1 level, the debt to GDP ratio could exceed 25 per
Telangana 6,915 1,512 2.0
cent12 as at end-March 2024 (BE) for 25 States/
Tripura 982 21 4.2
Uttar Pradesh 5,756 - 0.8 UTs (Statement 20 and Chart II.16).
Uttarakhand 4,305 177 5.4
West Bengal 11,186 816 1.9
2.32 The debt service ratio, measured in terms
of interest payment to revenue receipts (IP-RR),
Total 1,84,029 10,839 2.5
saw a sharp increase in 2020-21, but it has
‘-’ : Indicates no fund is maintained.
Source: RBI. gradually moderated thereafter, mainly due to
robust revenue receipts (Chart II.17).
7. Outstanding Liabilities Composition of Outstanding Liabilities
2.31 The debt-GDP ratio of States peaked at 31 2.33 The share of outstanding market loans in
per cent at end-March 2021 and declined to 27.5 total debt has been on an upward path in the post-
per cent by end-March 2023, supported by fiscal COVID period and is estimated to increase to 66
consolidation (Table II.8). At a disaggregated per cent by end-March 2024 (Table II.9). Similarly,

12
Average of debt-GDP ratio from 2015-16 to 2019-20.

20
 Fiscal Position of State Governments

Chart II.16: States’ Outstanding Liabilities at Chart II.17: Debt and Interset Burden
end-March 2024 (BE) (per cent of GSDP)

Source: Same as that for Table II.8. Source: Budget documents of State governments.

loans from the Centre have also moved higher stated earlier. On the other hand, the shares of
due to back-to-back loans given to States in lieu special securities issued to National Small Saving
of GST Compensation and 50-year interest-free Funds (NSSF)13, loans from banks and financial
loans distributed under the scheme for Special institutions and public accounts have witnessed a
Assistance to the States for Capital investment as steady decline.

Table II.9: Composition of Outstanding Liabilities of State Governments and UTs

(As at end-March)
(Per cent)

Item 2018 2019 2020 2021 2022 2023 RE 2024 BE

1 2 3 4 5 6 7 8
Total Liabilities (1 to 4) 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1. Internal Debt 72.7 72.2 73.5 74.0 73.0 73.4 74.5
of which:
(i) Market Loans 51.4 53.5 57.2 60.5 61.6 63.7 66.0
(ii) Special Securities Issued to NSSF 11.1 9.2 7.7 6.1 5.1 4.2 3.4
(iii) Loans from Banks and Financial Institutions 4.9 4.8 4.8 4.2 3.8 3.8 3.9
2. Loans and Advances from the Centre 3.8 3.6 3.0 5.1 7.2 7.9 8.6
3. Public Account (i to iii) 23.5 24.1 23.4 20.8 19.7 18.5 16.8
(i) State PF, etc. 10.3 10.2 9.8 8.8 8.4 8.2 7.8
(ii) Reserve Funds 4.1 4.2 3.8 3.4 3.4 3.1 2.8
(iii) Deposits & Advances 9.1 9.7 9.7 8.6 7.9 7.3 6.2
4. Contingency Fund 0.1 0.1 0.1 0.1 0.1 0.1 0.1

RE: Revised Estimate. BE: Budget Estimate.

Source: Same as that for Table II.8.

13
The trend appeared following the recommendation of the Fourteenth Finance Commission (FC-XIV) to exclude States from the National
Small Savings Fund (NSSF) financing facility (barring Delhi, Madhya Pradesh, Kerala and Arunachal Pradesh).

21
 State Finances : A Study of Budgets of 2023-24

Contingent Liabilities of States gradually rose to 3.8 per cent by end-March

2021. They remained at an elevated level till
2.34 After declining to 2 per cent of GDP by
end March 2022, with adverse implications for
March 2017, State government guarantees
debt sustainability (Table II.10). Data available
for 18 States and UTs indicate that outstanding
Table II.10: Guarantees Issued by guarantees decreased by around 16 per cent
State Governments
during 2022-23.
Year Guarantees Outstanding
(End-March) 8. Conclusion
` lakh crore As per cent of GDP
1 2 3 2.35 The debt-GDP ratio of States declined
2014 3.79 3.4 to 27.5 per cent as at end-March 2023 from the
2015 4.28 3.4 peak of 31 per cent at end-March 2021. At the
2016 3.64 2.6
individual level, however, the debt-GDP ratio for
2017 3.12 2.0
2018 4.30 2.5
some States remains high. The support received
2019 5.38 2.8 from the Centre in the form of 50-year interest free
2020 5.93 3.0 capex loans has helped in reducing States’ interest
2021 7.60 3.8
burden. The overall fiscal outlook for States
2022 8.90 3.8
remains favourable in 2023-24, with adequate
Source: State governments and CAG.
fiscal space for undertaking higher capex.

22
 Fiscal Position of State Governments

Annex I.1
Deficit Indicators - State-wise
(Per cent of GSDP)
State GFD RD PD
2021-22 2022-23 2023-24 2021-22 2022-23 2023-24 2021-22 2022-23 2023-24
(RE) (BE) (RE) (BE) (RE) (BE)
1 2 3 4 5 6 7 8 9 10
1 Andhra Pradesh 2.2 3.6 3.8 0.8 2.2 1.5 0.3 1.7 1.8
2 Arunachal Pradesh 3.1 7.5 5.9 -15.3 -14.6 -7.1 0.9 5.2 3.7
3 Assam 4.4 8.1 3.7 0.2 3.0 -0.5 2.9 6.6 2.1
4 Bihar 3.9 9.2 3.0 0.1 3.8 -0.5 1.8 7.1 0.8
5 Chhattisgarh 1.5 3.2 3.0 -1.1 -0.6 -0.7 0.0 1.6 1.6
6 Goa 3.2 5.1 4.7 -0.1 -0.6 -0.7 1.0 2.9 2.5
7 Gujarat 1.2 1.5 1.8 -0.3 -0.3 -0.4 -0.1 0.3 0.6
8 Haryana 3.6 3.3 3.0 2.3 1.8 1.5 1.5 1.2 1.1
9 Himachal Pradesh 3.0 6.4 4.6 -0.6 3.2 2.2 0.3 3.9 2.0
10 Jharkhand 0.7 2.2 2.7 -1.9 -2.4 -3.1 -1.0 0.5 1.1
11 Karnataka 3.3 2.7 2.5 0.7 0.3 0.5 2.1 1.4 1.2
12 Kerala 4.9 3.5 3.4 3.2 1.9 2.1 2.4 1.1 1.2
13 Madhya Pradesh 3.3 3.6 3.8 -0.4 -0.1 0.0 1.7 2.0 2.3
14 Maharashtra 2.1 2.7 2.5 0.5 0.6 0.4 0.8 1.4 1.2
15 Manipur 4.9 6.4 5.7 -4.0 -15.0 -14.9 3.0 4.2 3.7
16 Meghalaya 5.6 4.4 3.3 -1.7 -3.5 -4.7 3.1 1.9 0.9
17 Mizoram 1.3 7.0 3.2 -2.2 -1.3 -1.1 -0.3 5.2 1.5
18 Nagaland 0.8 6.3 2.7 -5.1 -3.3 -1.7 -2.1 3.2 -0.1
19 Odisha -3.1 2.8 3.0 -6.5 -2.3 -3.1 -4.0 1.9 2.1
20 Punjab 4.5 4.9 4.7 3.0 3.5 3.3 1.4 1.9 1.7
21 Rajasthan 4.0 4.3 4.0 2.1 2.3 1.6 1.7 2.2 1.9
22 Sikkim 2.4 4.4 4.3 -1.1 -2.0 -0.1 0.7 2.7 2.5
23 Tamil Nadu 4.0 3.2 3.4 2.2 1.3 1.4 1.9 1.2 1.4
24 Telangana 4.1 3.8 4.0 0.8 -0.2 -0.3 2.4 2.4 2.4
25 Tripura -0.1 4.0 5.3 -2.4 -0.6 0.0 -2.3 2.0 3.5
26 Uttar Pradesh 2.0 3.6 3.2 -1.7 -2.4 -2.6 -0.2 1.6 1.3
27 Uttarakhand 1.4 2.7 2.7 -1.5 -0.8 -1.3 -0.4 0.7 0.9
28 West Bengal 3.7 4.0 3.8 2.3 2.6 1.8 1.0 1.4 1.3
29 Jammu and Kashmir 5.6 3.1 4.7 0.0 -8.6 -8.3 1.9 -0.9 1.0
30 NCT Delhi 0.8 0.4 0.9 -0.4 -0.9 -0.5 0.4 0.1 0.6
31 Puducherry -0.1 0.0 1.8 -0.5 -1.0 0.2 -2.1 -1.9 -0.2
All States and UTs 2.8 3.4 3.1 0.4 0.5 0.1 1.0 1.7 1.4
RE: Revised Estimates. BE: Budget Estimates. RD: Revenue Deficit. GFD: Gross Fiscal Deficit.
PD: Primary Deficit.
Note: Negative (-) sign in deficit indicators indicates surplus.
Source: Budget documents of State governments.

23
 State Finances : A Study of Budgets of 2023-24

Annex I.2
States' Expenditure on Research and Development (R&D)
(₹ Crore)
2019-20 2020-21 2021-22 2022-23 2023-24
(RE) (BE)
Bihar
Total R&D (a to g) 14.9 15.3 30.5 62.8 114.3
(0.00) (0.00) (0.00) (0.01) (0.01)
a. Education
b. Medical, Health, Family Welfare and Sanitation
c. Agricultural Research 2.5 2.0 1.4 4.1 12.6
d. Industrial Research
e. Environmental Research
f. Infrastructure Research
g. Others 12.4 13.3 29.1 58.8 101.8
Haryana
Total R&D (a to g) 513.5 561.8 647.2 717.2 297.6
(0.07) (0.08) (0.07) (0.07) (0.03)
a. Education 18.5 13.0 14.6 25.7 18.5
b. Medical, Health, Family Welfare and Sanitation 0.0 0.8 1.0 0.4 0.5
c. Agricultural Research 434.7 504.9 602.4 654.3 227.5
d. Industrial Research
e. Environmental Research 4.0 3.7 5.7 2.9 0.6
f. Infrastructure Research 55.2 38.7 22.3 28.9 50.0
g. Others 1.1 0.8 1.2 5.1 0.4
Jammu and Kashmir
Total R&D (a to g) 65.2 68.1 77.2 115.6 79.7
(0.04) (0.04) (0.04) (0.05) (0.03)
a. Education 0.0 10.8 2.0 3.8 26.9
b. Medical, Health, Family Welfare and Sanitation 2.3 3.0 3.2 6.9 5.3
c. Agricultural Research 55.4 46.7 60.3 76.5 44.5
d. Industrial Research 0.0 0.0 0.0 0.0 0.0
e. Environmental Research 0.0 0.0 0.0 0.0 0.0
f. Infrastructure Research 7.6 7.5 7.3 25.3 3.0
g. Others 0.0 0.1 4.6 3.1 0.0

(Contd...)

24
 Fiscal Position of State Governments

2019-20 2020-21 2021-22 2022-23 2023-24

(RE) (BE)
Karnataka
Total R&D (a to g) 2061.4 1798.7 1826.9 1903.7 2051.6
(0.13) (0.11) (0.09) (0.08) (0.08)
a. Education 48.3 40.5 41.5 50.1 51.7
b. Medical, Health, Family Welfare and Sanitation 623.2 636.4 647.3 888.3 956.7
c. Agricultural Research 957.7 652.4 647.3 573.6 637.4
d. Industrial Research 6.5 4.6 4.8 0.9 0.8
e. Environmental Research 36.3 62.9 59.8 22.0 18.4
f. Infrastructure Research
g. Others 389.4 401.8 426.2 368.9 386.5
Odisha
Total R&D (a to g) 388.8 550.7 937.5 1216.3
(0.07) (0.08) (0.12) (0.14)
a. Education 125.5 195.3 298.4 500.1
b. Medical, Health, Family Welfare and Sanitation 25.7 29.8 73.7 105.8
c. Agricultural Research 24.6 96.6 175.7 199.2
d. Industrial Research 2.2 2.0 3.0 22.7
e. Environmental Research 15.6 12.9 20.3 17.9
f. Infrastructure Research 38.8 56.9 90.1 81.1
g. Others 156.3 157.3 276.5 289.6
Rajasthan
Total R&D (a to g) 2268.0 2356.2 2993.1 6309.4 6143.1
(0.23) (0.23) (0.25) (0.45) (0.39)
a. Education 10.2 20.9 16.8 73.3 83.9
b. Medical, Health, Family Welfare and Sanitation 1800.7 1977.5 2571.8 5746.2 5438.7
c. Agricultural Research 305.7 284.0 303.8 350.4 435.3
d. Industrial Research 0.0 0.0 0.2 0.8 0.5
e. Environmental Research 3.6 3.2 5.0 8.3 5.5
f. Infrastructure Research 77.8 41.7 45.4 49.7 72.4
g. Others 69.9 28.9 50.1 80.7 106.8

(Contd...)

25
 State Finances : A Study of Budgets of 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

(RE) (BE)
Sikkim
Total R&D (a to g) 4.1 4.4 3.6 11.1 14.7
(0.01) (0.01) (0.01) (0.03) (0.03)
a. Education 0.1 0.3 0.3 0.7 1.0
b. Medical, Health, Family Welfare and Sanitation 0.3 0.0 0.0 0.1 0.7
c. Agricultural Research 0.0 0.1 0.1 0.2 0.2
d. Industrial Research 0.6
e. Environmental Research 3.6 3.8 3.0 9.5 11.1
f. Infrastructure Research
g. Others 0.1 0.2 0.2 0.6 1.2
Tamil Nadu
Total R&D (a to g) 176.2 530.1 428.0 411.1 407.4
(0.01) (0.03) (0.02) (0.02) (0.02)
a. Education 12.9 11.0 8.8 17.5 74.9
b. Medical, Health, Family Welfare and Sanitation 4.3 4.6 4.4 5.3 5.3
c. Agricultural Research 80.3 425.2 331.7 249.8 167.6
d. Industrial Research 3.5 1.7 1.5 11.5 1.5
e. Environmental Research 7.8 7.3 9.4 12.4 14.3
f. Infrastructure Research 56.0 70.2 61.7 97.8 128.5
g. Others 11.6 10.1 10.5 16.8 15.3
West Bengal
Total R&D (a to g) 145.7 151.4 156.1 177.6 222.4
(0.01) (0.01) (0.01) (0.01) (0.01)
a. Education 1.8 1.8 1.9 3.3 5.4
b. Medical, Health, Family Welfare and Sanitation 7.7 4.7 3.3 8.9 9.3
c. Agricultural Research 96.1 111.0 108.8 118.6 130.4
d. Industrial Research 18.4 14.1 21.3 23.4 49.4
e. Environmental Research 6.1 2.2 2.2 3.0 6.3
f. Infrastructure Research 5.0 5.8 6.6 7.0 7.3
g. Others 10.6 11.9 12.1 13.5 14.4

(Contd...)

26
 Fiscal Position of State Governments

2019-20 2020-21 2021-22 2022-23 2023-24

(RE) (BE)
Puducherry
Total R&D (a to g) 1.2 1.7 2.1 1.7 1.5
(0.00) (0.00) (0.00) (0.00) (0.00)
a. Education 0.2 0.3 0.3 0.2 0.0
b. Medical, Health, Family Welfare and Sanitation 0.0 0.0 0.0 0.0 0.0
c. Agricultural Research 0.0 0.0 0.0 0.0 0.0
d. Industrial Research 0.0 0.0 0.0 0.0 0.0
e. Environmental Research 0.0 0.0 0.0 0.0 0.0
f. Infrastructure Research 0.0 0.0 0.0 0.1 0.1
g. Others 1.0 1.3 1.8 1.4 1.4

Note: Figures in parentheses are per cent of GSDP.

Source: State governments.

27