During FY25, the top seven States whose SOTR contributed up to 60 per cent of revenue receipts were Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Tamil Nadu and Telangana. 

Share of States’ own tax revenue in their revenue receipts grew to over 50 per cent during FY25 but with lower buoyancy said office of the Comptroller & Auditor General (CAG) in its report on States Finances. Meanwhile, States are getting more from the Centre as part of devolution.

CAG K Sanjay Murthy released the third edition of the Publication on State Finances 2024-25 on Tuesday. According to the report, States Own Tax Revenue (SOTR), the largest component of revenue receipts, rising significantly in absolute terms and increasing its share to 50.13 per cent in FY25 from about 49.55 per cent in FY24. although its buoyancy weakened to 0.67 in FY25 over 0.92 of FY24 and 1.43 of FY23. Tax buoyancy is a ratio of change in tax revenue in relation to change in gross state domestic product (GSDP).

Top states

During FY25, the top seven States whose SOTR contributed up to 60 per cent of revenue receipts were Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Tamil Nadu and Telangana. On the other hand, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim and Tripura had SOTR of less than 20 per cent of their total revenue receipts.  The average annual growth of SOTR of all the States combined during 2013-14 to 2016-17 was 10.47 per cent, in the three years period prior to introduction of GST, which increased to 11.05 per cent during the period 2018-19 to 2024-25, the report said.

According to the report, in FY25, capital expenditure of ₹8.49 lakh crore constituted 16.59 per cent of the total expenditure by the States, the remaining 83.41 per cent being revenue expenditure. During the 10-year period, a spurt in share of capital expenditure was evident in FY 2015-16 and FY 2016-17 as compared to corresponding previous year.

“The rise in capital expenditure during these two financial years was mainly driven by States investing in the equity of power sector State public sector undertakings and by the extension of loans to power utilities, following the takeover of 75 per cent of the debt of State-owned power distribution companies by 14 State governments under the Ujwal DISCOM Assurance Yojana (UDAY),” the report said.

On an average, capital expenditure of the States has remained in the range of 13–20 per cent of the total budgetary spending in the 10-year period of FY16 and FY25 the highest being 19.68 per cent in FY17 and the lowest of 13.27 per cent in FY21.

Share of subsidies

The report highlighted that subsidies at ₹4.37 lakh crore was one of the major components of revenue expenditure in several States. The principal recipients of subsidy payments are energy utilities, and agriculture related activities. The decadal trend during 2015–16 to 2024-25 shows that in most years the share of subsidy expenditure has been in the region of 8-10 per cent of the total revenue expenditure of all States combined.

Talking about liabilities, the report said that as on March 31, 2025, it showed a wide variation from 15.79 per cent of GSDP in case of Odisha to 52.84 per cent of GSDP in case of Arunachal Pradesh. During the period FY16 to FY25 as a percentage of GSDP, total liabilities increased from to 27.89 per cent from 24.19 per cent. In FY25, all States were in fiscal deficit ranging from 1.66 per cent of GSDP in the case of Goa to 8.69 per cent in Meghalaya.

States’ Expenditure: Key Trends

•      Committed + Subsidies + GIA Salary = Rs 26.12L Cr (61.17% of revenue expenditure)

•      Subsidy grew 214 per cent in decade (FY16: ₹1.39L Cr → FY25: ₹4.37L Cr)

•      Revenue exp grew 137 per cent; Committed exp also grew 137 per cent

•      Nagaland: 74 per cent committed; Maharashtra: 29 per cent

•      14 States had committed expenditure more than 50 per cent of their revenue expenditure

Published on June 16, 2026