CAG Report: Indian states are facing a 'debt bomb'... total expenditure on salaries, pensions and interest payments has increased 2.5 times in 10 years

News Topical, Digital Desk : According to a CAG report, states' expenditure on salaries, pensions and interest payments has increased 2.5 times in the last 10 years. CAG said that it was Rs 6,26,849 crore in 2013-14 which increased by 2.49 times to Rs 15,63,649 crore in 2022-23. According to the report, a large part of revenue expenditure is either committed or tied up. Salaries, pensions and interest payments on public debt and liabilities are considered 'committed expenditure'.

During the 10-year period from 2013-14 to 2022-23, revenue expenditure by states accounted for 80-87 percent of total expenditure and as a percentage of combined GSDP, it was around 13-15 percent. In FY 2022-23, revenue expenditure was 84.73 percent of total expenditure and 13.85 percent of combined GSDP.

According to a report prepared by the Comptroller and Auditor General of India on the financial expenditure of states, out of the total revenue expenditure of Rs 35.95 billion in the financial year 2022-23, committed expenditure was Rs 15.63 billion. Subsidies were spent at Rs 309.625 billion and grants-in-aid at Rs 11.26 billion. These three components, totaling Rs 29.99 billion, accounted for more than 83 percent of total revenue expenditure, according to the report.

Salary is the largest component of committed expenditure

According to the report, committed expenditure on salaries, pensions, and interest payments for all states was ₹626,849 crore in 2013-14, rising to ₹1563,649 crore in 2022-23. Subsidy expenditure, which was ₹96,479 crore for all states combined in 2013-14, increased to ₹309,625 crore in 2022-23.

From 2013-14 to 2022-23, revenue expenditure increased 2.66 times, committed expenditure increased 2.49 times, and subsidies increased 3.21 times. Salaries were the largest component of committed expenditure, followed by pension expenditure and interest payments. This was the case for 19 states in 2022-23, but in nine states (Andhra Pradesh, Gujarat, Haryana, Karnataka, Punjab, Rajasthan, Tamil Nadu, Telangana, and West Bengal), interest payments exceeded pension expenditure.

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