The Comptroller and Auditor General of India (CAG) reported that states’ spending on salaries, pensions, and interest payments rose 2.5 times over the past decade. In 2022-23, this committed expenditure reached ₹15.63 lakh crore, up from ₹6.26 lakh crore in 2013-14.
CAG’s State Finances 2022-23 report showed that revenue expenditure is mostly fixed. In 2022-23, it accounted for 84.73% of total spending and 13.85% of combined GSDP. Salaries made up the largest share, followed by pensions and interest payments.
Subsidies also increased sharply, rising from ₹96,479 crore in 2013-14 to ₹3.09 lakh crore in 2022-23. Combined with grants-in-aid of ₹11.26 lakh crore, these three components formed over 83% of total revenue expenditure.
Nine states, including Andhra Pradesh, Gujarat, and Tamil Nadu, spent more on interest than pensions, showing higher debt costs. While 17 states targeted revenue surplus, five fell into deficit. Nine states received Finance Commission revenue deficit grants during the year.
The report highlights that most of states’ budgets are now tied up in fixed commitments, leaving limited flexibility for other spending priorities.
