States’ Committed Expenditure Nearly Tripled in a Decade: CAG Report

The committed expenditure of states on salaries, pensions, and interest payments has risen 2.49 times over the past decade, touching ₹15,63,649 crore in FY 2022-23 compared to ₹6,26,849 crore in FY 2013-14, according to the State Finances 2022-23 report released by the Comptroller and Auditor General (CAG) of India.

The report noted that a large share of states’ revenue expenditure remains tied up in committed liabilities, limiting fiscal flexibility. Salaries made up the biggest component of this spending, followed by pensions and interest payments. In FY 2022-23, this pattern was observed in 19 states.

Overall, revenue expenditure constituted between 80% and 87% of states’ total expenditure during 2013-14 to 2022-23. As a percentage of combined Gross State Domestic Product (GSDP), it remained in the range of 13–15%. In FY 2022-23, revenue expenditure stood at 84.73% of total expenditure and 13.85% of combined GSDP.

Out of the total revenue expenditure of ₹35,95,736 crore in FY 2022-23, committed expenditure accounted for ₹15,63,649 crore, subsidies for ₹3,09,625 crore, and grants-in-aid for ₹11,26,486 crore.

The report emphasized that revenue expenditure—comprising day-to-day operational costs such as salaries, pensions, subsidies, interest payments, and grants—does not create direct assets, but remains a critical component of state finances.

(Source: BL)