Source: IE
Context:
The Comptroller & Auditor General of India (CAG) released the State Finances Publication 2025, highlighting a sharp rise in states’ salary bills and debt burden over the past decade.
About the Publication:
- Annual report by the CAG covering all 28 states.
- Tracks revenue, expenditure, debt, subsidies, and fiscal sustainability.
- Acts as a guide for policymakers to understand state-level fiscal risks.
Key Highlights (2025 Report):
- Salary Bills: Increased 2.5 times in 10 years, touching ₹16.6 lakh crore; biggest component of committed expenditure.
- Subsidies: Tripled to ₹3.09 lakh crore. Punjab leads with subsidies at 17% of total expenditure.
- Committed Expenditure: Accounts for 43.5% of revenue expenditure. Highest in Nagaland (74%) and Kerala (63%).
- Public Debt: Jumped 3.4 times to ₹59.6 lakh crore, nearly 23% of combined GSDP, raising medium-term fiscal risk.
- Union Tax Devolution: States’ average share stayed ~27%. Five states (UP, Bihar, MP, West Bengal, Maharashtra) received 50% of devolved taxes.
