Statsguru: States' finances are improving, debt likely to shoot up

When the Union government announced Budget for 2022-23, it had projected revenue to be 8.5% of GDP. A Business Standard analysis of latest report on state finances showed that states are catching up

When the Union government had announced the Budget for 2022-23, it had projected revenue to be 8.5 per cent of gross domestic product (GDP). A Business Standard analysis of the latest report on state finances released by the Reserve Bank of India last week showed that states were catching up. The revenue-to-GDP ratio projected by states was 8.2 — the highest in the past six years (chart 1). While states’ own revenue as a proportion of GDP is expected to rise, it is still low as a proportion of total revenue (the other part comes from central transfers). In 2022-23,