Once considered a BIMARU state, UP has emerged as top-performing state with a Rs 37,000 crore revenue surplus, per the CAG report. UP’s strong economic growth under CM Yogi highlights improved tax collections, budget expansion and rising GSDP.
Once labeled a BIMARU state for its backwardness and financial constraints, Uttar Pradesh has now recorded remarkable economic progress. According to the latest report of the Comptroller and Auditor General of India (CAG) reviewing states’ economic performance over the past decade, the state posted a revenue surplus in the 2023 fiscal year.
The CAG report shows that 16 states currently earn more than they spend. Uttar Pradesh leads this list with a revenue surplus of ₹37,000 crore. This achievement reflects the impact of policies under Chief Minister Yogi Adityanath, positioning the state on a path of sustainable development and setting an example for others to follow
Situation better in BJP-ruled states
The CAG report ranks Gujarat (Rs 19,856 crore), Odisha (Rs 15,560 crore), Jharkhand (Rs 13,920 crore), Karnataka (Rs 13,496 crore), Chhattisgarh (Rs 8,592 crore), Telangana (Rs 6,944 crore), Kerala (Rs 5,310 crore), Madhya Pradesh (Rs 4,091 crore), and Goa (Rs 2,399 crore) after Uttar Pradesh. Northeastern states such as Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura, and Sikkim also figure among the surplus states. Notably, at least 10 of these 16 states are governed by the BJP.
12 states still grapple with revenue deficits
According to the report, 12 states in the country are still grappling with revenue deficits. These include Andhra Pradesh (-43,488 crore), Tamil Nadu (-36,215 crore), Rajasthan (-31,491 crore), West Bengal (-27,295 crore), Punjab (-26,045 crore), Haryana (-17,212 crore), Assam (-12,072 crore), Bihar (-11,288 crore), Himachal Pradesh (-6,336 crore), Kerala (-9,226 crore), Maharashtra (-1,936 crore) and Meghalaya (-44 crore). The report clearly shows that the income of these states is not sufficient to cover their expenditure.
West Bengal, Kerala, and Punjab highly dependent on central grants
According to the CAG report, states such as West Bengal, Kerala, Himachal Pradesh, and Punjab remain dependent on revenue deficit grants from the Centre to meet their financial needs. In FY 2023, West Bengal alone accounted for 16% of such grants, followed by Kerala at 15%, Andhra Pradesh at 12%, Himachal Pradesh at 11%, and Punjab at 10%.
In contrast, states like Haryana, Maharashtra, Telangana, Karnataka, Tamil Nadu, and Gujarat recorded the highest State Own Tax Revenue (SOTR) as a share of total revenue receipts in FY 2022-23. On the other hand, northeastern states including Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura reported SOTRs below 30%, highlighting their limited revenue capacity.
Following states strengthen tax and non-tax sources of income
The CAG report highlights states that have built strong revenue streams, both tax and non-tax. Haryana leads with over 80% of its total income generated from its own revenue, followed by Telangana (79%), Maharashtra (73%), Gujarat (72%), Karnataka (69%), Tamil Nadu (69%), and Goa (68%). This indicates that these states rely more on their own resources than on central transfers.
State GST (SGST) forms the largest share of their revenue, while VAT and excise duty on liquor, petroleum products, and electricity—kept outside the GST framework—also remain significant contributors. In FY 2022-23, states received ₹1,72,849 crore in Finance Commission grants, of which ₹86,201 crore was given as Revenue Deficit Grants.
A glance at the positive changes in Uttar Pradesh…
The CAG report has acknowledged that Uttar Pradesh is progressing at twice the pace under the double-engine government. A comparison between the Samajwadi Party government (2012–17) and the Yogi Adityanath government (2017–present) shows a sharp contrast in economic performance.
Tax Collection: In 2012-13, state tax revenue stood at Rs 54,000 crore, rising to Rs 85,000 crore by 2016-17—an increase of Rs 31,000 crore in five years. Under the Yogi government, tax collections jumped from Rs 95,000 crore in 2017-18 to Rs 2,25,000 crore in 2024-25—an increase of over Rs 1.3 lakh crore in eight years.
Budget Size: The state budget grew from Rs 2.0 lakh crore in 2012-13 to Rs 3.46 lakh crore in 2016-17, an increase of Rs 1.5 lakh crore. In contrast, under Yogi Adityanath, the budget expanded from Rs 3.84 lakh crore in 2017-18 to Rs 8.0 lakh crore in 2025-26—more than doubling in just eight years.
Gross State Domestic Product (GSDP): The state’s GSDP was about Rs 8 lakh crore in 2012-13 and reached Rs 12.5 lakh crore in 2016-17, showing growth of Rs 4.5 lakh crore. Under the current government, GSDP rose from Rs 13.6 lakh crore in 2017-18 to a projected Rs 30 lakh crore in 2025-26, marking an unprecedented increase of Rs 16.4 lakh crore in eight years.