Monthly Economic Review: Nine of 18 States in Revenue Deficit
Why in the news
The Finance Ministry’s April 2026 Monthly Economic Review points to growing stress in state finances. It comes as the West Asia crisis raises uncertainty for the economy.
Key facts
- Revenue deficit: 9 of 18 major states projected in deficit in FY2026-27.
- Interest burden: several states use more than 15% of revenue receipts to pay interest.
- Review issuer: Department of Economic Affairs, Ministry of Finance.
| State | Projected revenue deficit FY27 |
|---|---|
| Himachal Pradesh | -2.4% |
| Punjab | -2.2% |
| Kerala | -2.1% |
Wider picture
The review also notes that India’s crude oil basket averaged $113 a barrel in March. It sees risks to inflation, the fiscal deficit and the external deficit tilted upward, while growth risks tilt downward. It says the Centre enters the year from a position of relative prudence, and that an Economic Stabilisation Fund has been created in the public account.
Exam angle
- Revenue deficit means revenue expenditure exceeds revenue receipts; Himachal Pradesh tops the projected list.
- The review is a monthly publication of the Department of Economic Affairs.
- Note the 9-of-18 figure and the 15% interest benchmark.