The combined public debt of India’s 28 states has increased sharply to Rs 59.6 lakh crore in the financial year 2022-23, more than three times the Rs 17.57 lakh crore recorded in 2013-14. This significant rise is highlighted in a first-of-its-kind decadal report by the Comptroller and Auditor General of India (CAG), released by CAG K Sanjay Murthy during the State Finance Secretaries Conference.
Total Debt and GSDP
The total public debt includes internal borrowings and loans and advances from the Centre. At the end of 2022-23, the debt stood at Rs 59,60,428 crore, which is 22.96% of the combined Gross State Domestic Product (GSDP) of Rs 2,59,57,705 crore. In comparison, the debt-to-GSDP ratio in 2013-14 was 16.66%. GSDP measures the value of all finished goods and services produced within a state’s borders, reflecting the overall economic output.
State-wise Debt Rankings
The report also highlights the state-wise debt-to-GSDP ratios:
- Punjab: 40.35% – Highest debt ratio among all states
- Nagaland: 37.15%
- West Bengal: 33.70%
- Maharashtra: 14.64%
- Gujarat: 16.37%
- Odisha: 8.45% – Lowest debt ratio
Implications of Rising State Debt
The sharp increase in state debt over the past decade indicates growing fiscal pressure on state governments. High debt-to-GSDP ratios can limit states’ ability to spend on development projects, social welfare, and infrastructure. States like Punjab, Nagaland, and West Bengal may face greater challenges in managing finances, while states with lower debt ratios like Odisha, Maharashtra, and Gujarat have more fiscal flexibility.
This CAG report provides crucial insights for policymakers, economists, and investors to assess the fiscal health and sustainability of India’s state finances over the last decade.
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