The debt-to-GDP ratio is an important measure for assessing how well India, and its individual states, can handle their debt. While India’s overall debt-to-GDP ratio gives a sense of the country’s financial health, it doesn’t show the unique financial situations of each state.
| State | Debt-to-GDP (%) in FY 2024-25 (Budget Estimate) | Fiscal Deficit(%) in FY 2024-25 (Budget Estimate) |
|---|---|---|
| Punjab | 44.1 | 3.8 |
| Himachal Pradesh | 42.5 | 4.7 |
| Arunachal Pradesh | 40.8 | 6.3 |
| Nagaland | 38.6 | 3 |
| Meghalaya | 37.9 | 3.8 |
| West Bengal | 36.9 | 3.6 |
| Rajasthan | 36 | 3.9 |
| Bihar | 35.7 | 3 |
| Manipur | 34.5 | 3.1 |
| Tripura | 34.5 | 4 |
| Kerala | 34 | 3.4 |
| Sikkim | 34 | 5.4 |
| Andhra Pradesh* | 33.3 | 3.8 |
| Uttar Pradesh | 32.7 | 3.46 |
| Madhya Pradesh | 32 | 4.1 |
| Mizoram | 29 | 2.8 |
| Telangana | 27.38 | 3 |
| Jharkhand | 27 | 2 |
| Tamil Nadu | 26.4 | 3.4 |
| Haryana | 26.2 | 2.8 |
| Chattisgarh | 24.4 | 3.7 |
| Uttarakhand | 24.2 | 2.4 |
| Karnataka | 23.7 | 3 |
| Assam | 23.47 | 3.5 |
| Goa | 21.9 | 2.5 |
| Maharashtra | 18.4 | 2.6 |
| Gujarat | 15.3 | 1.9 |
| Odisha | 13.6 | 3.5 |
| Delhi | 3.94 | 0.7 |
What is Debt to GDP Ratio?
The debt-to-GDP ratio is a financial measure that compares a country’s (or state’s) total debt to its Gross Domestic Product (GDP). It indicates the ability of a nation to pay back its debt with its economic output. A lower debt-to-GDP ratio generally suggests that a country is producing enough to manage its debt, while a higher ratio could imply potential difficulties in managing or repaying debt without economic stress.
Formula:
Debt-to-GDP Ratio = (Total Debt / GDP) × 100
Example:
If a country has a total debt of $5 trillion and a GDP of $20 trillion, the debt-to-GDP ratio is:
(5 / 20) × 100 = 25%
Why It’s Important:
- Economic Health Indicator: The debt-to-GDP ratio gives a quick sense of a country’s economic stability and financial health.
- Debt Management: A high ratio suggests that a country might struggle to pay off debt without slowing down growth or increasing taxes.
- Investor Confidence: Lower ratios generally boost confidence among investors, signaling that the country is less risky and has a more stable economy.
Countries or states with lower debt-to-GDP ratios are typically seen as having better control over their finances, while a high debt-to-GDP ratio can indicate a potential risk of financial instability.
