State governments spent nearly Rs 4.4 lakh crore on subsidies in 2024-25, almost three times the amount spent a decade ago, according to the latest Comptroller and Auditor General (CAG) report. The findings highlight sharp differences in how states allocate funds towards power, agriculture and welfare support. (Reuters)
The CAG report identifies Karnataka, Madhya Pradesh, Tamil Nadu and Punjab among the states where subsidies accounted for more than 13.5% of total expenditure in 2024-25, making them some of the country’s largest subsidy spenders relative to their budgets. (Reuters)
Maharashtra, Tamil Nadu, Karnataka, Madhya Pradesh and Rajasthan together contributed around Rs 2.3 lakh crore in subsidy expenditure during FY25. According to the CAG, that amounts to roughly 54% of total subsidy spending by states. (PTI)
Among all states, Rajasthan recorded the highest expenditure on electricity subsidies, both in absolute terms and as a share of spending. Karnataka ranked next in power subsidy outgo, the report noted. (Reuters)
Subsidy spending varies widely across India. While six states spent more than 10% of their total expenditure on subsidies, another six states kept the share below 1%, reflecting very different fiscal priorities and economic structures. (Reuters)
Arunachal Pradesh, Sikkim, Nagaland, Meghalaya, Tripura and Assam reported subsidy expenditure of less than 1% of their total spending in 2024-25, according to the CAG assessment. (Reuters)
The report also lists Kerala, Mizoram, Uttarakhand and Manipur among states where subsidy expenditure remained below 2% of total spending, significantly lower than the national leaders in subsidy outgo. (Reuters)
According to the CAG, lower subsidy levels in several northeastern and hill states are linked to smaller consumer bases and limited industrial and irrigation activity. Support in these states is largely focused on transport, food and social-sector programmes. (PTI)
Energy subsidies, largely linked to electricity, accounted for 43% of total subsidy payments by states in FY25. Agriculture-related support, including price support, fertiliser, seeds and waivers, made up another 30%, the report said. (Reuters)
While overall expenditure by states increased about 2.3 times over the past decade, subsidy spending rose nearly threefold. The CAG data points to the growing role of subsidies in state finances across India. (Reuters)
