State debt to hit Rs 94 lakh cr: Report

New Delhi: States' debt is projected to reach ?94.4 lakh crore by March 2025, accounting for 32.7% of gross state domestic product (GSDP), according to a CareEdge Ratings report released Wednesday. The debt is expected to rise further to ?103.6 lakh crore by FY26 due to capital expenditure and a growing revenue deficit, the report noted. In 2019, the debt-GSDP ratio was 29.3%.

The analysis covered 15 states that accounted for 87% of India's GSDP in FY24, including Bihar, Gujarat, Kerala, Maharashtra and UP.

Revenue deficit is forecast to hit 0.6% of GSDP in FY25 and 0.63% in FY26. Fiscal deficit is seen falling to 2.7% of GSDP in FY25, mainly due to underachievement of capital outlay goals.