The Comptroller and Auditor General of India (CAG) released the *State Finances 2024-25* report on 16 June 2026. It reveals that out of 28 states, 13 posted a revenue surplus while 15 recorded a revenue deficit for the fiscal year 2024‑25.
Key Developments
- Eight states (Uttar Pradesh, Gujarat, Jharkhand, Manipur and nine others) achieved surplus revenues.
- Among the 18 states that had set a revenue‑surplus target, only 9 met it; the rest, including Assam, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Mizoram and Telangana, fell into deficit.
- Seven states aimed for a zero‑deficit position (Goa, Jharkhand, Punjab, Rajasthan, Tamil Nadu, Tripura, Uttar Pradesh). Four of them (Goa, Jharkhand, Tripura, Uttar Pradesh) actually posted a surplus.
- Four deficit states – Himachal Pradesh, Mizoram, Punjab and West Bengal – received deficit‑grant assistance from the Finance Commission.
- If the indicative fiscal‑deficit ceiling of 3 % of GSDP (set by the Fifteenth Finance Commission) is applied, 18 states exceed the target.
Important Facts
The aggregate revenue deficit of the 15 deficit states, before offsetting surplus, was ₹3,46,385 crore, equal to 1.5 % of their combined GSDP. After netting the surplus of 13 states, the net revenue deficit fell to ₹2,19,041 crore or 0.68 % of the combined GSDP of all 28 states.
State‑own tax receipts formed 50 % of the total revenue receipts of ₹40.52 lakh crore. Within this, State GST contributed more than 43 %.
States that saw a sharp rise in fiscal deficit compared with 2023‑24 include Andhra Pradesh, Assam, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Mizoram, Nagaland, Odisha, Tripura and Uttarakhand.
Exam Relevance
Understanding the distinction between revenue deficit and overall fiscal deficit is essential for GS‑3 (Economy) questions on state finances. The role of the CAG and the Finance Commission illustrates the federal fiscal architecture, a frequent topic in Polity and Economy papers.
Way Forward
States need to broaden their tax bases and improve collection efficiency to sustain revenue surplus. Greater reliance on State GST can reduce dependence on central transfers. Simultaneously, adhering to the 3 % fiscal‑deficit ceiling will help maintain macro‑economic stability and avoid excessive borrowing.