Committed expenditure of states on rise: Report

Threatens ability to fund crucial development programmes

- HIMANSHI BHARDWA]

Indian states are increasingly facing fiscal constraints that threaten their ability to fund growth-enhancing and crucial development programmes, with 62 per cent of their revenue receipts in the financial year 2024 (FY24) spent on committed expenditures such as salaries, pensions, interest payments and subsidies, according to the annual ‘State of State Finances 2025’ report by PRS Legislative Research.

Drawing on budget documents and audit accounts of all states and select Union Territories, the report finds that 53 per cent of revenue receipts were consumed by salaries, pensions, and interest payments, while subsidies accounted for another 9 per cent in FY24.

Punjab topped the list with committed expenditure exceeding revenue receipts at 107 per cent, followed by Himachal Pradesh (85 per cent), Tamil Nadu (77 per cent), Kerala (75 per cent), and Haryana (71 percent).