From “BIMARU” to Budgetary Backbone: Why Some Indian States Now Run Revenue Surpluses—and What Punjab Can Do to Get Back to Fiscal Health

Abstract

Indian state finances have undergone a quiet, consequential shift. In the most recent audited year, sixteen states posted revenue surpluses, meaning their recurring revenues exceeded their recurring (revenue) expenditures. Uttar Pradesh, long caricatured in public discourse as part of the “BIMARU” laggards, recorded the largest surplus, followed by Gujarat, Odisha, Jharkhand, Karnataka, Chhattisgarh, Telangana, Uttarakhand, Madhya Pradesh, and Goa; a majority of Northeastern states also feature on the surplus list. The same data show Punjab, Andhra Pradesh, Haryana, Himachal Pradesh, Rajasthan, Tamil Nadu and West Bengal at the top of the revenue?deficit table. The empirical surprise, then, is that some of the so?called “progressive” states are now running persistent revenue deficits, while several erstwhile laggards are in surplus. The analytical question is why—and, more importantly, what to do in states where fiscal stress is entrenched.

This essay unpacks (i) the architecture of state revenues in a post?GST, post?compensation world; (ii) the expenditure rigidities that consume fiscal space; (iii) how states like Uttar Pradesh and Madhya Pradesh moved from perennial stress to sustainable surpluses; and (iv) what ails Punjab—with a practical, sequenced roadmap to restore revenue?expenditure balance without abandoning growth or social protection.