State Budgets 2025-26: Fiscal Prudence of Five Big States
Why in the news
The 2025-26 budgets of five big states revealed a split between fiscally prudent states and those leaning on populist spending with rising debt.
Key facts
- Revenue surplus: Uttar Pradesh, Gujarat, Odisha.
- Revenue deficit: Rajasthan, West Bengal, both also with high debt and fiscal deficits.
- Highest capital outlay relative to economy: Odisha and UP.
| State | Debt/GSDP | Other indicators |
|---|---|---|
| Uttar Pradesh | About 30% | Largest economy, lowest per capita income; 43% of revenue from own taxes; welfare push yet surplus |
| Gujarat | About 15% | Per capita income three times UP’s; over 60% own tax revenue; moderate capital outlay |
| Odisha | 12.7% | Capital outlay 6.1% of GSDP; only 28% own tax revenue; surplus despite higher spending |
| West Bengal | About 38% | Capital outlay 1.94% of GSDP; own tax about 42% of revenue receipts, stagnant |
| Rajasthan | 36.5% | Fiscal deficit above 3.5% of GSDP; lowest capital outlay relative to spending |
Takeaways
- Gujarat and Odisha have the strongest fiscal positions.
- West Bengal and Rajasthan face heavy debt and deficits that limit investment.
Exam angle
- Lowest debt ratio: Odisha (12.7%); highest: West Bengal (about 38%).
- Terms: revenue surplus, fiscal deficit, capital outlay, GSDP.