India State Fiscal Health: Arunachal Pradesh Logs Highest Revenue Surplus in FY25

Among 25 states and Union Territories with comparable FY25 Budget Estimates, Arunachal Pradesh recorded the largest revenue surplus relative to its Gross State Domestic Product (GSDP), as per Business Standard news report.  

Its revenue deficit ratio was -12.1%, meaning revenue receipts were higher than revenue expenditure.The data is part of Business Standard’s India State Fiscal Health Tracker, which is based on the Reserve Bank of India’s 2025 Handbook of Statistics on Indian States.  

The tracker examines eight different indicators of state finances. 

Meghalaya and J&K Follow 

Meghalaya recorded the second-largest revenue surplus, with its ratio at -6.5% of GSDP. Jammu and Kashmir followed at -6.2%, while Jharkhand and Odisha recorded ratios of -3.7% and -3.1%, respectively. 

These five states had negative revenue deficit ratios in the FY25 Budget Estimates. In this measure, a negative number indicates a surplus, as revenue receipts exceed spending on revenue items. 

Punjab Has the Highest Revenue Deficit 

Punjab recorded the highest revenue deficit relative to GSDP at 2.8%. Kerala and Andhra Pradesh followed with deficits of 2.2% each. Himachal Pradesh recorded a ratio of 1.9%, while West Bengal stood at 1.8%. 

A positive ratio indicates that a state's revenue expenditure is higher than its revenue receipts. The figure does not show the absolute size of the deficit, but its value relative to the state economy. 

How the Revenue Deficit Is Measured 

The report suggests that the tracker calculates revenue deficit as a share of GSDP at current prices. The formula used is (Revenue Deficit ÷ GSDP at current prices) × 100. 

Using GSDP as the base makes it possible to compare states with economies of different sizes. It prevents a larger state’s deficit in rupee terms from being directly compared with that of a smaller state. 

What the Ranking Does Not Show 

The revenue deficit ratio is one of eight indicators covered by the tracker. The ranking should therefore not be taken as a complete assessment of a state's fiscal position. 

The comparison excludes states and UTs where FY25 data was unavailable, including Goa, Gujarat, Manipur, Mizoram, Nagaland, Sikkim, Ladakh, and several Union Territories. 

Read More: NIIF Infrastructure Fund II Secures $2 Billion Commitments! 

Conclusion  

FY25 Budget Estimates showed Arunachal Pradesh with the largest revenue surplus among the states and UTs covered, followed by Meghalaya and Jammu and Kashmir. 

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