The Comptroller and Auditor General (CAG) of India has released its first-of-its-kind State Finance 2022-23 report on public debt of all 28 states. According to the report, states’ debt has increased from ₹17.57 lakh crore in 2013-14 to ₹59.60 lakh crore in 2022-23.

According to the first-of-its-kind State Finance 2022-23 report of the Comptroller and Auditor General (CAG) of India, the public debt of all 28 states has tripled in ten years – from ₹17.57 lakh crore in 2013-14 to ₹59.60 lakh crore in 2022-23.
This report presents a decadal analysis of the fiscal position of the states. It was released by CAG K. Sanjay Murthy during the Conference of State Finance Secretaries.
According to the report, at the end of the financial year 2022-23, the total public debt of 28 states was 22.96 percent of their combined Gross State Domestic Product (GSDP) of ₹2,59,57,705 crore. GSDP is the value of all finished goods and services produced within the geographical boundaries of a state.
The report said, “Compared to the total public debt of states at ₹17,57,642 crore in 2013-14, the debt in the financial year 2022-23 has increased 3.39 times, from 16.66 percent of GSDP to 22.96 percent.”
States are required to achieve a fiscal deficit of 3.5% of GSDP in the financial year 2022-23.

CAG’s first State Finance 2022-23 Report Key Facts

According to the report, at the end of 2022-23, the highest debt-to-GSDP ratio was recorded in Punjab at 40.35 percent, followed by Nagaland (37.15 percent) and West Bengal (33.70 percent).
The lowest ratios were recorded in Odisha (8.45 percent), Maharashtra (14.64 percent), and Gujarat (16.37 percent).
The report said, “As on March 31, 2023, the public debt liability of eight states was more than 30 percent of their Gross State Domestic Product (GSDP); the public debt liability of six states was less than 20 percent of their Gross State Domestic Product (GSDP); and the remaining 14 states’ public debt liability was between 20 to 30 percent of their respective Gross State Domestic Product (GSDP) in the financial year 2022-23.”
States’ public debt includes borrowings from the open market through securities, treasury bills, bonds, etc.; borrowings from the State Bank of India and other banks; Ways and Means Advances (WMA) from the Reserve Bank of India; and loans from financial institutions such as the Life Insurance Corporation (LIC) and the National Bank for Agriculture and Rural Development (NABARD).
Wide disparity in revenue capacity: The share of States’ Own Tax Revenue (SOTR) is 70% in Haryana and only 9% in Arunachal Pradesh.
Rising subsidy burden: Agricultural loan waivers, free/subsidized services (such as electricity for agriculture and households), cash transfers to farmers, youth, women, etc.
High committed expenditure (such as interest payments, spending on salaries and wages, etc.): During the period from 2013-14 to 2022-23, its share has remained more than 42% of revenue expenditure and more than 6% of GSDP (except in 2013-14 and 2016-17).
Others: Limited revenue mobilization (e.g., dependence on GST), etc.

Comptroller and Auditor General

Currently, the Comptroller and Auditor General (CAG) of India is Shri K. Sanjay Murthy, who was administered the oath by the President of India on November 21, 2024, and assumed office on the same day. He is a 1989 batch IAS officer of the Himachal Pradesh cadre.
In the context of the CAG, constitutional provisions are mainly mentioned in Articles 148 to 151 of the Constitution, which relate to the appointment, oath, duties, powers, and reports of the CAG. Article 148 provides for an independent office of the CAG.
The CAG can be removed in the same manner and on the same grounds as a judge of the Supreme Court, ensuring his independence.