Arunachal Pradesh Leads FY25 Revenue Surplus; Punjab Logs Deficit

Arunachal Pradesh registered the highest revenue surplus among 25 states and Union Territories in the financial year 2024-25 (FY25), according to Business Standard’s India State Fiscal Health Tracker. Its surplus stood at -12.1% as a share of Gross State Domestic Product (GSDP).

This fiscal performance indicates that Arunachal Pradesh’s revenue receipts significantly exceeded its revenue expenditure during the period. Conversely, Punjab recorded the highest revenue deficit, with its expenditure surpassing receipts by 2.8% of GSDP.

Understanding Revenue Surplus and Deficit

A revenue surplus occurs when a state’s revenue receipts are greater than its revenue expenditure, reflecting a financially healthy position in its day-to-day operations. Conversely, a revenue deficit arises when revenue expenditure outstrips receipts, suggesting reliance on borrowing or capital receipts for routine expenses.

The India State Fiscal Health Tracker, compiled by Business Standard, bases its analysis on data from the Reserve Bank of India’s 2025 Handbook of Statistics on Indian States. This methodology allows for a standardized comparison by expressing revenue deficit as a percentage of each state’s GSDP.

State Fiscal Performance Overview for FY25

Beyond Arunachal Pradesh, several other states also achieved a revenue surplus for FY25, indicating prudent fiscal management. These states managed to keep their revenue expenditures below their income levels.

• States with Revenue Surplus: Meghalaya, Jammu and Kashmir, Jharkhand, and Odisha.

On the other end of the spectrum, states grappling with significant revenue deficits highlight ongoing fiscal challenges. Their revenue spending consistently exceeded the income generated from various sources.

• States with Highest Revenue Deficit: Punjab (2.8% of GSDP), followed by Kerala, Andhra Pradesh, Himachal Pradesh, and West Bengal.

Scope and Limitations of the Tracker

It is important to understand that this specific ranking focuses exclusively on the revenue deficit as a percentage of GSDP. It does not provide a comprehensive evaluation of a state’s overall fiscal health, which would include other factors like capital expenditure and debt levels.

The analysis also excluded several states and Union Territories from its current assessment. This exclusion was primarily due to the unavailability of complete FY25 data, ensuring that only comparable and verified information was used for the rankings.