Own Revenue Supplies About 10 Per Cent of Manipur's Budgeted Revenue Receipts for 2025-26 and 80 Per Cent of Haryana's, While State Debt at March 2026 Runs From 18 Per Cent of GSDP in Gujarat to 60 Per Cent in Arunachal Pradesh

The Reserve Bank of India’s state-by-state tables for 2025-26 have Haryana budgeting to raise about 80 per cent of its revenue receipts from its own taxes and other sources, and Manipur about 10 per cent. The rest in each case is the state’s share of central taxes plus grants from the Centre. For all states and Union Territories together the split is about 58 per cent own and 42 per cent from the Centre, the aggregate picture set out in how a state budget works.

The numbers below come from the Reserve Bank’s State Finances: A Study of Budgets of 2025-26, released on 23 January 2026, and from the Sixteenth Finance Commission’s report for 2026 to 2031, which has its own state-level tables for 2023-24. Revenue receipts are what a state government takes in on its revenue account in a year, before any borrowing. Gross state domestic product (GSDP) is the value of everything produced inside the state. The 2025-26 figures are budget estimates, meaning plans and not outcomes. The three Union Territories with legislatures (Delhi, Jammu and Kashmir, Puducherry) are left out of the rankings, though Delhi’s own-revenue share by the same arithmetic is about 88 per cent.

Own revenue supplies between 10 and 80 per cent of receipts

Own revenue is a state’s own tax plus its own non-tax income, such as mineral royalties and fees. The Reserve Bank says state GST, sales tax, state excise duties, and stamp duty with registration fees together make up about 90 per cent of states’ own tax collections. The state GST is one half of the tax explained in how GST works.

Source: tuput’s division of own tax plus own non-tax revenue by revenue receipts, from Statement 33 of the Reserve Bank’s study (budget estimates for 2025-26). Statement 33 publishes the inputs to one decimal, so each share is approximate. The four highest and four lowest states are shown.

The Finance Commission’s 2023-24 figures, taken from state accounts, point the same way. It puts Telangana and Haryana at 80 per cent, Karnataka at 75.7 and Maharashtra at 75.1, against 9.7 for Manipur and 13.5 for Arunachal Pradesh (paragraph 5.45, page 92). Outside the northeastern and hilly group, the lowest 2025-26 share is Bihar’s, at about 26 per cent.

The Commission groups ten states as northeastern and hilly (NEH): Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand. Income and reliance do not always move together. The Commission says Sikkim has the highest per capita income in the country, yet devolution and grants were 68.6 per cent of its revenue in 2023-24 (paragraphs 5.46 and 5.73, pages 93 and 104).

Own tax follows the size of the economy only part of the way

Per head, own tax revenue rises with income. The Commission plotted all 28 states for 2023-24 and found a positive relationship between per capita GSDP and per capita own tax revenue (paragraph 5.44, page 92). The ratio of own tax to GSDP, which measures rupees of tax raised per rupee of output, shows no such pattern. Bihar’s income per head is lower than Uttar Pradesh’s, and Uttar Pradesh’s is lower than West Bengal’s, yet Bihar and West Bengal had the lower ratios, 5.6 and 5.4 per cent against Uttar Pradesh’s 7.6. Tamil Nadu and Karnataka, among the highest-income states, were at 6.6 and 6.3 per cent (paragraphs 5.42 and 5.43, pages 90 and 91, and Figure 5.8). The Commission says this is why earlier commissions used the ratio as a measure of tax effort.

Non-tax income matters mainly where there are mines. The Commission names Odisha, Chhattisgarh and Jharkhand, and its 2023-24 table shows Odisha raising 13.8 per cent of GSDP as own revenue, Goa 13.2 and Chhattisgarh 10.6, against 3.3 for Manipur, 4.7 for Tripura and 5.5 for Nagaland (paragraph 5.41, page 90). PRS Legislative Research adds two local causes. It says Goa and Puducherry earn above-average non-tax revenue because their electricity departments run power distribution themselves, and that Bihar’s and Gujarat’s lower tax ratios may be due to close to zero excise revenue, since both states enforce alcohol prohibition. For 2025-26 PRS puts Uttar Pradesh’s own-tax ratio highest, at 9.6 per cent of GSDP, and notes that its collections have fallen short of its budget targets in past years.

Central transfers run from under 2 per cent of GSDP to 58 per cent

A state’s transfers from the Centre are its share of central taxes, distributed under Article 270 of the Constitution on the Finance Commission’s advice, plus grants-in-aid. PRS says the grants include money for centrally sponsored schemes, covered in how money flows from Delhi to the states, and grants recommended by the Commission.

Source: Reserve Bank of India, State Finances: A Study of Budgets of 2025-26, Statement 33, column CT/GSDP (budget estimates for 2025-26). For all states and Union Territories the same column shows 6.0 per cent of GDP.

Against a state’s own receipts, the Commission’s 2023-24 data show that the average reliance on devolution and grants was 42.2 per cent across states. It was 69.0 per cent for the NEH states and 39.9 per cent for the other 18 (paragraph 5.46, page 93). Uttarakhand, at 53.2 per cent, was the lowest in the NEH group, and Bihar (72.3), Uttar Pradesh (55.5) and West Bengal (53.5) were the highest outside it. The six smaller northeastern states relied on the Centre for 79 per cent or more of their receipts, with Arunachal Pradesh at 87 per cent and Manipur at 90 (paragraph 5.77, page 105). PRS estimates that its north-eastern and Himalayan group receives 68 per cent of revenue receipts as central assistance in 2025-26. The Commission traces the dependence to “limited economic bases” in the states at the top of the list (paragraph 5.45).

Debt runs from 18 per cent of GSDP to 60 per cent

For all states and Union Territories, the Reserve Bank’s budget estimate for end-March 2026 is outstanding liabilities of 29.2 per cent of GDP. By state, the range is wide.

Source: Reserve Bank of India, State Finances: A Study of Budgets of 2025-26, Statement 20 (budget estimate for end-March 2026). Delhi, a Union Territory, is at 1.5 per cent.

The Finance Commission’s version for end-March 2024 puts the range among the non-NEH states at 15.7 per cent (Odisha) to 42.9 (Punjab), and among the NEH states at 25.5 (Uttarakhand) to 50.9 (Arunachal Pradesh) (paragraph 5.54 and Table 5.11, pages 100 and 101). The levels differ from the Reserve Bank’s. The Commission’s table draws on the Ministry of Statistics’ comparable GSDP series and adjusts liabilities for GST compensation loans, while the Reserve Bank uses National Statistics Office data supplemented by state estimates. PRS says only Gujarat, Maharashtra and Odisha had met, as of 2024-25, the 20 per cent debt level that the 2017 FRBM Review Committee recommended for states.

A ratio to GSDP depends on the denominator. The Commission says Bihar’s high ratio “can be partially viewed as an artefact of its low GSDP” (paragraph 5.57, pages 100 and 101), and the same logic applies to small economies that receive large transfers. Arunachal Pradesh’s revenue receipts are 66.8 per cent of its GSDP in Statement 33, so its end-March 2026 debt is about 0.9 times a year of its 2025-26 receipts by tuput’s division, against about 3.7 times for Punjab and about 2.0 for all states and Union Territories. Interest tells a similar story. Statement 1 puts interest at 2.9 per cent of Arunachal Pradesh’s revenue receipts in 2025-26, 2.8 per cent in Odisha, 22.4 per cent in Punjab and 12.2 per cent across all states and Union Territories.

The Commission names two events that moved debt in many states at once. COVID-19 raised it in 2020-21, and in 2015-16 and 2016-17 nine states took over the debts of their electricity distribution companies under the UDAY scheme, each showing an effect of more than 0.5 per cent of GSDP on its debt in one or both years (paragraph 5.78, page 106).

What Finance Commission money does for hill and northeastern states

The Commission’s tables show the NEH states receiving more money per head than the average. It gives the forest criterion a 10 per cent weight in its 2026-31 formula (Table 8.8, page 171), and says forest area is also a partial proxy for the higher cost of building and moving goods in hilly terrain. The ten NEH states held 33.4 per cent of India’s dense forest in 2021 and 5.3 per cent of its population (paragraph 8.36, page 152). The formula itself is set out in the Finance Commission article.

The ratio of the NEH states’ share of devolution to their share of population rose from 1.1 under the Eleventh Commission to 1.99 under the Fifteenth, which covered 2020-21 to 2025-26. Under the Fifteenth, Arunachal Pradesh received almost fifteen times the overall per capita devolution, Sikkim over seven times, Mizoram more than five times, and Nagaland, Meghalaya and Manipur three times or more. Tripura received 2.3 times and Assam 1.2 times (paragraphs 8.71 and 8.72, page 163). The Commission concludes that, on average, the group is “amply compensated for their cost disadvantage on account of hilly terrain”.

The Constitution adds a separate channel. Article 275(1) lets Parliament charge grants on the Consolidated Fund to states it determines to be “in need of assistance”, with different sums for different states. Two provisos make some payments obligatory. One covers approved schemes for the welfare of Scheduled Tribes and for raising the level of administration in Scheduled Areas, and the other covers Assam’s Sixth Schedule tribal areas. Article 275 is among the provisions in force since 26 January 1950, the date Article 394 gives for the Constitution’s commencement.

The Commission links spending to the money. Sikkim, Arunachal Pradesh and Goa spent the most per head on health and education in 2023-24, and the Commission says all three receive significantly larger per capita amounts from devolution than the overall average (paragraph 5.53, pages 98 and 99). Arunachal Pradesh put 29.2 per cent of its 2023-24 expenditure into capital projects (paragraph 5.49, page 97). For disaster funds, the Commission recommends that the Union pay 75 per cent of the State Disaster Response Fund and State Disaster Mitigation Fund in non-NEH states and 90 per cent in NEH states (paragraph 11.61, page 246).

Revenue deficit grants, which cover the gap between a state’s revenue and its spending, are the contested piece. The Fifteenth Commission recommended them for seventeen states (paragraph 9.9, page 179). The Sixteenth recommends none, arguing that expecting them weakens the reason to raise revenue and trim spending (paragraph 9.50, page 191). Arunachal Pradesh, Bihar, Gujarat, Karnataka and Uttar Pradesh told the Commission they doubted the grants’ effectiveness. Assam, Himachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim, Tripura and several other states called them indispensable, and some NEH states called them a “lifeline” because of sparse populations and high infrastructure and establishment costs (paragraphs 9.28 to 9.30, pages 184 and 185).

What the figures do and do not show

The 2025-26 columns are budgets. The Reserve Bank takes 2023-24 as accounts, 2024-25 as revised estimates and 2025-26 as budget estimates, and it derives end-March 2025 and end-March 2026 liabilities by adding budgeted yearly flows to the audited end-March 2024 stock from the Comptroller and Auditor General’s accounts. Its note calls the liabilities data “provisional and subject to reconciliation” with the Comptroller and Auditor General’s records.