The Finance Ministry has warned that states with revenue deficit and high debt burden will find it difficult to deal with fiscal shocks, including the current crisis, forcing them to either prioritize expenditure away from productive sectors, or approach the Center for more funds at a time when it is trying to strengthen its own finances. In its Monthly Economic Review (MER) for April 2026, the Department of Economic Affairs in the Finance Ministry said nine of the 18 large states it analyzed were in revenue deficit as per their own projections for 2026-27. Seven states are estimated to be in revenue surplus, while one is in revenue balance.
Center has warned that states with revenue deficit and high debt burden will find the current crisis more challenging
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