Spending by states spikes 180% to Rs 42L cr in a decade, UP tops chart

A decadal audit of state finances by the Comptroller and Auditor General (CAG) of India revealed an increase of 180 per cent in total state expenditure from 2013-14 to 2022-23, rising from Rs 15.9 lakh crore to Rs 42.4 lakh crore. The highest expenditure was in social services.

Uttar Pradesh led all states with a surge of nearly 220 per cent, its spending growing from Rs 1.9 lakh crore to Rs 4.8 lakh crore, driven by rural schemes and agricultural initiatives. It was followed by Maharashtra at Rs 4.7 lakh crore, a 190 per cent growth fuelled by subsidies and urban infrastructure; Tamil Nadu at nearly Rs 3.2 lakh crore, a 152 per cent jump linked to manufacturing and welfare policies; and Rajasthan at nearly Rs 2.4 lakh crore, a 176 per cent increase.

Over the decade, revenue expenditure constituted 80 to 87 per cent of total state spending. In 2022-23, revenue expenditure accounted for 84.73 per cent of total expenditure, equivalent to 13.85 per cent of the combined Gross State Domestic Product (GSDP). A large portion of this is committed spending — salaries, pensions and interest payments — totalled Rs 15.63 lakh crore, subsidies were Rs 3.09 lakh crore and grants-in-aid were Rs 11.26 lakh crore. Together, these three components constituted over 83 per cent of the total revenue expenditure of Rs 35.95 lakh crore.

In contrast, capital expenditure averaged between 13 and 20 per cent of total spending over the 10-year period, peaking at 19.68 per cent in 2016-17 and falling to a low of 13.27 per cent in 2020-21. In 2022-23, capital expenditure was 15.27 per cent of total expenditure. Revenue expenditure covers maintenance, administrative costs and upkeep, while capital expenditure is for acquiring permanent assets or enhancing existing ones, including debt repayment and loans.

Sector-wise, spending was concentrated on immediate needs. Social and economic sectors together accounted for 66 to 71 per cent of combined expenditure over the decade. In 2022-23, the general sector accounted for 30.34 per cent of total expenditure, the social sector 38.24 per cent and the economic sector 28.90 per cent, the CAG report said.

On the other hand, sectors with future-oriented focus received minimal shares. The science and technology sector accounted for just 1 per cent of expenditure over the decade, while industries and minerals accounted for nearly 1-2 per cent, indicating sluggish growth and missed opportunities for innovation.