
18/07/2025
State debt tripled from ₹27.4 lakh cr in 2015 to estimated ₹93.9 lakh cr in 2025. The debt-to-GSDP ratio, which shows the debt relative to the size of the economy, peaked at 31% post-COVID & remains high at 28.8% in 2025. Despite more fiscal autonomy for states since 2014 states haven’t prioritised health or education. Education spend is stuck at ~2.6% of GDP; most spend just 3.5–5.5% of budgets on health.
Read full report by Prachi Salve to understand why it’s not just how much states borrow, but how they spend it, that affects their fiscal health: https://www.indiaspend.com/budget/high-debt-low-returns-how-some-states-get-into-financial-trouble-961076