Comptroller and Auditor General of India K. Sanjay Murthy released the ‘State Finances 2024-25’ report in New Delhi on June 16, 2024 [1].
The findings highlight a systemic increase in financial instability across the country's regional governments. This universal deficit suggests that no state was able to balance its budget during the fiscal year, signaling a broad trend of mounting liabilities.
According to the report, all 28 Indian states reported fiscal deficits in FY 2024-25 [1]. This comprehensive failure to maintain surpluses underscores the growing gap between state revenues and expenditures.
Financial pressures have extended beyond annual deficits to long-term debt. The combined liabilities of the states rose to Rs 90.51 lakh crore as of March 31, 2025 [2]. This figure represents a significant accumulation of debt that may impact future infrastructure and social spending.
Murthy said the findings outline the fiscal pressures facing the states. The report serves as a formal audit of how regional administrations are managing their finances amidst economic volatility.
The data indicates that the fiscal stress is not isolated to specific regions but is a nationwide phenomenon. With every state posting a deficit, the report points toward a critical need for fiscal consolidation across the Indian administrative landscape.
“All 28 Indian states reported fiscal deficits in FY 2024-25”
The universal reporting of deficits across all 28 states indicates that India's sub-national governments are struggling with structural imbalances. When combined liabilities reach Rs 90.51 lakh crore, the cost of debt servicing may crowd out essential public investment, potentially slowing regional economic growth and increasing reliance on central government bailouts or stricter borrowing limits.
