State government debt has risen sharply, with nearly one-third of outstanding securities maturing over FY28–FY32. Refinancing pressures could keep borrowing costs elevated
Higher debt and persistent fiscal deficits leave states with less room to invest in infrastructure, health, education and other long-term priorities
Growing subsidies and unconditional cash transfers support households, but they also increase fiscal pressure if not matched by sustainable revenue growth
States must improve tax administration, strengthen GST collections and rationalise stamp duties to boost revenues without relying excessively on fresh borrowing
Better property valuation, stronger compliance and higher non-tax revenues can improve fiscal health while creating room for productive public investment
Containing debt and reducing deficits are essential. Sound state finances will lower borrowing costs, encourage private investment and support sustainable economic growth