The outstanding debt of Indian states has seen a sharp rise over the past five years, reflecting increased borrowing amid economic challenges. According to data from the Reserve Bank of India (RBI), the total outstanding liabilities of all states and Union Territories (UTs) have surged from Rs 47.9 lakh crore in 2019 to Rs 83.3 lakh crore in 2024, marking a 74% increase.
Top 10 States with Highest Outstanding Debt in 2024
Among the states, Tamil Nadu has the highest outstanding debt at Rs 8.3 lakh crore, followed by Uttar Pradesh at Rs 7.7 lakh crore and Maharashtra at Rs 7.2 lakh crore. West Bengal ranks fourth with Rs 6.6 lakh crore, while Karnataka follows with Rs 6.0 lakh crore. Rajasthan (Rs 5.6 lakh crore), Andhra Pradesh (Rs 4.9 lakh crore), Gujarat (Rs 4.7 lakh crore), Kerala (Rs 4.3 lakh crore), and Madhya Pradesh (Rs 4.2 lakh crore) complete the list of the top 10 states with the highest debt burdens.
State-wise Debt Growth in last five years
The growth in outstanding liabilities varies across states. Among the major states, Madhya Pradesh recorded the highest increase of 114%, rising from Rs 2 lakh crore in 2019 to Rs 4.2 lakh crore in 2024. Karnataka and Tamil Nadu closely follow with 109% and 108% increases, respectively. Andhra Pradesh’s outstanding debt rose by 84%, while Rajasthan and Kerala witnessed an 80% and 76% rise, respectively. Maharashtra had a relatively lower debt growth of 65%, while Uttar Pradesh recorded the lowest increase at 35%.
Debt in Relation to State GDP (GSDP at current prices)
The burden of debt on states is often measured in relation to their Gross State Domestic Product (GSDP). Among the major states, Maharashtra has the lowest outstanding debt-to-GDP ratio at 18%, followed by Karnataka at 24%. On the other hand, West Bengal has the highest debt-to-GDP ratio at 39%, followed by Kerala and Rajasthan at 37% each. Tamil Nadu and Madhya Pradesh stand at 31%, while Andhra Pradesh has a ratio of 34%. Uttar Pradesh has a relatively moderate debt burden at 30% of its GSDP.
Maharashtra Leads in State GDP
Maharashtra continues to be the economic powerhouse of India, with the highest state GDP at current prices of Rs 40.44 lakh crore in 2023-24. Tamil Nadu follows at Rs 27.22 lakh crore, while Uttar Pradesh stands at Rs 25.48 lakh crore. Karnataka and West Bengal have state GDPs of Rs 25.01 lakh crore and Rs 17.01 lakh crore, respectively. Data for Gujarat’s state GDP for 2024 was not available.