States’ Expenditure Surges 131% to Rs 51.20 Lakh Crore: CAG Report
Comptroller and Auditor General of India report on state finances, 2024-25, on a wooden desk.
Key Highlights
A CAG report highlights a significant increase in states’ total expenditure between FY16 and FY25, raising concerns about state finances.
India’s state governments have seen their total expenditure surge by a massive 131% over the past decade, reaching Rs 51.20 lakh crore by FY25. This significant increase, flagged by the Comptroller and Auditor General of India (CAG), signals a worrying trend for state finances.
Decade of Spending Growth
The CAG’s Publication on State Finances 2024-25 report reveals a sharp escalation in spending:
- Total expenditure jumped from Rs 22.18 lakh crore in FY 2015-16.
- It climbed to Rs 51.20 lakh crore in 2024-25, marking a 131% increase.
Key Drivers and Concerns
While this growth in spending largely aligned with economic expansion, it was primarily fueled by welfare and development programmes. However, the report also highlighted that revenue expenditure continues to dominate state budgets, raising ongoing concerns about fiscal sustainability.