News Brief
CAG Report Flags Sharp Contrasts In State Finances: Uttar Pradesh Leads In Surplus, Andhra Tops Deficit
Sixteen states recorded a revenue surplus, while twelve ended the year in deficit
The Comptroller and Auditor General (CAG) of India released its review of state finances, revealing stark differences in fiscal performance across the country in 2022-23. Sixteen states recorded a revenue surplus, while twelve ended the year in deficit.
Uttar Pradesh posted the highest surplus at Rs 37,000 crore, followed by Gujarat (Rs 19,865 crore), Odisha (Rs 19,456 crore), Jharkhand (Rs 13,564 crore) and Karnataka (Rs 13,496 crore).
Notably, Uttar Pradesh and Madhya Pradesh, demonstrated significant fiscal improvement. In contrast, Andhra Pradesh faced the steepest revenue deficit at Rs 43,488 crore, followed by Tamil Nadu (Rs 36,215 crore) and Rajasthan (Rs 31,491 crore).
The report highlighted the growing reliance of states on Union transfers. “An analysis of the states’ revenue for the period 2013-14 to 2022-23 shows an increasing trend of grants and central assistance from the Union,” the CAG noted.
Grants rose from Rs 1,92,109 crore in FY 2013-14 to Rs 5,91,830 crore in FY 2022-23, though their share peaked in 2020-21.
Six states—Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal, Maharashtra and Rajasthan received over 50 per cent of Union tax proceeds, while nine states accounted for nearly 60 per cent of total central grants.
A critical concern is the surge in committed expenditure—salaries, pensions and interest payments which increased 2.49 times to Rs 15,63,649 crore in FY 2022-23.
Alongside subsidies (Rs 3,09,625 crore) and grants-in-aid (Rs 11,26,486 crore), these items accounted for over 83 per cent of total revenue expenditure of Rs 35,95,736 crore.
Salaries remained the largest component in most states, although interest payments exceeded pensions in Andhra Pradesh, Gujarat, Haryana, Karnataka, Punjab, Rajasthan, Tamil Nadu, Telangana and West Bengal, indicating rising debt servicing pressures.
The report also noted that 17 states aimed for revenue surplus, five for revenue deficit, and six targeted zero deficit. Of the 17 aiming for surplus, only 12 achieved it, while Finance Commission revenue deficit grants supported nine deficit states.
