Those who swore we would stop buying Russian crude after February 2022 now have egg on their faces. We kept buying because the economics were obvious.

The 7.8% Q1 growth, beating forecasts amid oil shocks and geopolitical noise, explains why the debt scare never took hold. Central debt-to-GDP has eased toward 56-58%. Fresh borrowing is going into capital expenditure rather than consumption. Russian oil remains a large, discounted share of our imports.

Interest payments eat a big slice of revenue. That is real. But so is the record of meeting every obligation on time. Performance, not panic, is the better measure.

More data here: https://politypolicy.com/TheUnionBudget

A quick reminder of what I’ve been building. India, in Numbers — at politypolicy.com — is data journalism done the way I wish more of it were: no rhetoric, just data.

Each piece takes one hard question about India and makes the numbers undeniable. You can move the sliders yourself, read every source, and check my working. That’s the whole point.

This week’s piece is about oil, and why the Strait of Hormuz keeps me up at night, and a few ministers in the Prime Minister’s Cabinet too.

The barrels we don’t see, and the cost we don’t see. India imports 88.6 per cent of the oil it burns — nearly two billion barrels a year — and almost half of it crosses a single chokepoint: Hormuz.

Our net oil import bill runs around $103 billion a year. That is roughly four times India’s entire current-account deficit. Strip oil out of the ledger and India actually runs a surplus with the rest of the world. Oil is the single reason we don’t.

Why the volatility in Hormuz is a fiscal nightmare.

Every $10 per barrel increase costs India about $17 billion a year — for the same oil, not a drop more.

And the damage doesn’t stop at the import bill. Here is the chain that makes it vicious: a war shock pushes crude higher; higher crude rattles markets; frightened money flees to the dollar as a haven; and those outflows drain capital out of India and push the rupee down further. One strait trembles, and it reaches all the way to your wallet.

Reminds me of that one dialogue from The West Wing, my favourite TV show. Franz Ferdinand, who was the nephew of the Austro-Hungarian emperor, was killed by a group called the Black Hand. And because they were a Serbian nationalist society, the empire declared war on Serbia. Then Russia, which was bound by a treaty, was forced to mobilise, which meant that Germany had to declare war on Russia. Then France declared war on Germany, and that was World War I. Because the emperor's nephew was killed.

For Nirmala Sitharaman, this is the ‘Great Fiscal War’, one she has been fighting for many years now.

How exposed are we? More than almost any economy our size — the piece ranks India against the whole world, so you can see exactly where we stand rather than take my word for it.

And if you’ve ever wondered why your petrol price barely moved while crude doubled — that’s the CrudeShield tool.

It shows, to the day, what petrol would have cost if the pump had chased global crude, against what you actually paid.

The gap is the government quietly absorbing the shock by cutting its own excise. You can watch precisely how it shielded you at the pump — and what it cost the exchequer to do it.

Go have a look. If it makes you think, the job is done. And if you’d pass it to one person who’d appreciate this kind of work, that is how it grows.

Every time crude ticks down, someone posts a candlestick and declares petrol should cost ₹70, that we’re being looted, and that deregulation is a con.

Great line. Lazy thinking.

So I did the boring thing instead: I pulled five years of exact daily pump prices for Delhi, Mumbai, Chennai and Kolkata, the real daily Brent price, the real daily rupee — and built the counterfactual. If petrol had actually chased global crude, their world, here’s what you’d have paid.

Spoiler: at the April 2026 peak, a pure crude follower charges ₹153 per litre. You paid ₹94.77. That ₹58 gap, in a single day, is the whole argument.

Here’s what the ranters miss.

We import ~85% of our oil. Eighty-five per cent. That isn’t a market position; it’s a vulnerability we carry every single day — our pump price is held hostage by factors we simply don’t control. One bad mood swing in the Oval Office, and we are left wondering about the stability and continuity of our crude supply.

When Hormuz flared, crude spiked, and the rupee sagged in the same breath, because a weaker rupee makes every imported barrel dearer.

That’s also why ethanol isn’t a green talking point — every litre we blend at home is a litre we don’t import, a sandbag against the next Hormuz.

Managed deregulation is quieter, less sexy, and — the data says — it held the line.

Don’t take my word. Take the numbers. Click any day. Read the shield yourself.

A holiday in a sash, they say — handshakes, banquets, a photograph, and home. It is an easy joke to make, and it lands, because the point of these visits is so rarely explained in terms anyone can hold onto.

So let me offer one. This week he is in Indonesia and Australia. Here is what those two countries actually have.

Indonesia sits on roughly 42 per cent of the world’s nickel reserves and produces close to 60 per cent of its supply — nickel being the metal that batteries, and therefore electric vehicles, cannot do without.

India and Jakarta are building a framework to process that nickel, and rare-earth magnets, for export back home.

Australia is a different kind of prize. It is among the world’s largest sources of lithium, cobalt and rare earths, and home to the biggest rare-earth processing capacity outside China. Since 2022, India’s KABIL has been quietly funding due diligence and research across Australian lithium and cobalt projects.

Neither trip is about a sash.

And neither is new. This has been going on, deal by deal, for four or five years now — across thirty-five nations.

The United States and Japan, yes, but also Argentina and Zambia, Namibia and Mongolia, Bolivia and Côte d’Ivoire. Countries you will not have seen the evening news dwell on, signed one after another, mostly without fanfare.

Put them together, and a pattern appears. India does not have all the reserves it needs, cannot yet do all the processing it wants, and is only beginning to make the chips it will depend on.

So it has been wiring other nations into a single grid — some for what lies under their soil, some for the technology to refine it, some for the fabs. Semiconductors, rare earths, critical minerals: the three things the future is built from, gathered from six continents.

Which brings us back to the joke. The next time the Prime Minister lands somewhere unfamiliar and the mockery begins, it is worth asking a quieter question — not what award he is collecting, but what he is securing.

More often than not, the answer is buried in the ground beneath his hosts’ feet.

I’ve built something to make that grid visible: an interactive map you can travel through, one country at a time, watching the network light up as India reaches across the world.

You’ll find it — along with a growing set of data stories on India — at politypolicy.com. There are more coming.

The complete story, right here.

Good Afternoon.

Today, I’d like to share my new website with you: politypolicy.com.

Discourse cannot be a one-way street. Beyond the reactions, rants, and rhetoric, there is data — and that’s what politypolicy.com is all about.

On my Substack, I’ll continue sharing my ideas, opinions, and commentaries. The website will serve as a supplement to those stories, where you can interact with the data, draw your own conclusions, and develop perspectives that enrich our discourse.

The charts and infographics will continue on Substack as usual, but the website is built, at its core, for interactive storytelling.

If you visit the site (best viewed on a desktop or laptop), you’ll find six stories — five on state finances and one on delimitation. I’ve covered these topics on Substack, but here you can explore the live data for yourself. This is just the beginning.

Going forward, you’ll see more stories on elections, critical geopolitical issues, and any other subject that involves data. To be honest, even I don’t know yet exactly what I’ll add next, but I can promise that everything on the website will be interactive and immersive.

I hope you enjoy using it and will share your suggestions, ideas, and feedback. I’m looking forward to it.

No rants, reactions, or rhetoric. Only data. For those who really care.

Tushar

The most alarming statistic?

95 per cent of Punjab’s borrowing goes into financing its deficit. That borrowing comes with interest, which further inflates the state’s balance sheet, and at the end of the day there is little left for asset creation over the long run. On interest as a percentage of total expenditure, Punjab ranks the highest of any state in India.

The economic thinking in Punjab is flawed, truth be told. It would not be an exaggeration to say the state remains stuck in the 1960s and 1970s.

Undoubtedly, the Green Revolution was instrumental in addressing India’s food security problem, and the agricultural framework it built sustained the country through many difficult years. But that was six decades ago. The India of the 2020s does not resemble the India of the 1960s.

What makes Punjab’s balance sheet more disappointing is that the state — unlike Bihar, Uttar Pradesh, Rajasthan or Madhya Pradesh — did not inherit an array of legacy problems on the economic front. It was always far more prosperous.

To take one example: when toilets were built across India under the Swachh Bharat Mission, Punjab and Haryana registered low numbers — largely because they already had these amenities (along with houses, cooking gas and tap water) far earlier than most.

But the state’s resistance to modernity in agriculture, and its regressive attitude towards private investment, is now taking a toll on its balance sheet — pushing it towards damage that may be hard to reverse.

Beneath the headline demand to repeal the three farm laws, the 2020‑21 protest also hardened Punjab’s positions on the things that hurt it most: a legal guarantee for MSP (fiscally near‑impossible), the continuation of power subsidies even for wealthy farmers, and resistance to crop diversification away from wheat and paddy. It also demonised private‑sector participation, leaving potential investors wary.

How much blame lies with the Aam Aadmi Party, now running the government in Punjab?

Some facts. They inherited a state deep in debt, with ballooning interest payments, salaries, pensions and subsidies. Where one can fault the Bhagwant Mann government is the lack of will to trim even a few subsidies despite the thumping mandate it won. Power would have been the place to start.

In their bid to appease farmers, both Congress and AAP have done tremendous damage to the state’s finances. But beyond the parties, the problem stems from a mindset that refuses to acknowledge the need for modernity in farming. Jammu has lavender, Himachal has horticulture, Haryana has industry. But what does Punjab have, except nostalgia from six decades ago?

Maharashtra (₹45.32 lakh cr)

Tamil Nadu (₹31.19 Lakh Crore)

Uttar Pradesh (₹29.78 Lakh Crore)

Karnataka (₹28.84 Lakh Crore)

Gujarat (₹27.04 Lakh Crore)

West Bengal (₹18.15 Lakh Crore)

Rajasthan (₹17.04 Lakh Crore)

Telangana (₹16.41 Lakh Crore)

Andhra Pradesh (₹15.93 Lakh Crore)

Madhya Pradesh (₹15.03 Lakh Crore)

Kerala (₹12.49 Lakh Crore)

Haryana (₹12.14 Lakh Crore)

Bihar (₹9.92 Lakh Crore)

Odisha (₹8.90 Lakh Crore)

Chhattisgarh (₹5.68 Lakh Crore)

Jharkhand (₹5.16 Lakh Crore)

Goa (₹1.21 Lakh Crore)

Conclusion

The complete picture. It’s all red. Against the Himalayan states, with their restricted geography and economic potential, Punjab’s balance sheet falters.

Trim the subsidies for rich farmers, and divert the resources towards enabling the private sector. Punjab can become the agro-processing hub of India, and they have the geography, human resources, infrastructure, and climate in its favour, but it’s the mindset that needs an upgrade. Diversify your options, or else there is no way to pay for the time that has been lost.

For the benefit of the readers. I have added a board without the Himalayan states.

This is the sixth article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state, as we have done for Gujarat, Uttar Pradesh and Punjab, and how their spending patterns compare against those of its counterparts.

Further Reading:

In 2017, he was elevated to the position of the Chief Minister of Uttar Pradesh. One of the BIMARU states then. The Centre’s welfare push was still in its adolescence, so tap water connections, toilets, proper housing, gas cylinders, and bank accounts were only beginning to transform lives in Uttar Pradesh’s villages.

For Yogi Adityanath, however, the biggest challenge was not on the economic or infrastructure front, but law and order. Ten years later, his crackdown against the criminal syndicates, some even rivalling terrorist organisations in threat quotient, defines his legacy.

Brand Yogi is all about law and order, they say. And in Uttar Pradesh, law and order is an enabler for the economy. If Yogi had not made many uncomfortable with his relentless attacks on the syndicates, many wouldn’t have felt confidence in the state’s economic potential.

The perception of threat is largely addressed, but that should not take away from what Yogi has quietly achieved on the fiscal front.

Here’s a comparison of the numbers between 2016-17, the final year of the Akhilesh Yadav Government, and 2024-25.

The economy of India’s largest state has grown 2.5 times since 2016-17, but the fiscal fundamentals remain healthy. It’s not an economy on steroids or subsidies, despite the low per capita, and despite an array of legacy problems, both social and economic, that will take another decade to be eradicated completely.

Uttar Pradesh will touch the trillion dollar economy mark, somewhere in the early 2040s (I am being conservative here). And Yogi Adityanath has ensured the right launchpad for that pursuit.

Compared to most states in India, Uttar Pradesh is doing far better on the fiscal side. The comparison with Tamil Nadu is what should surprise many. The saffron state leads on all ten fiscal fronts, and this is when its human capital, social capital, and economic prowess are only beginning to be tested.

The coastal state has manufacturing on its side, but the vicinity to NCR will give Uttar Pradesh the thrust it needs. The political instability will always be a variable that will threaten the economic trajectory of Uttar Pradesh, but for now, this is the fiscal report card of Chief Minister Yogi Adityanath.

Maharashtra (₹45.32 lakh cr)

Tamil Nadu (₹31.19 Lakh Crore)

Karnataka (₹28.84 Lakh Crore)

Gujarat (₹27.04 Lakh Crore)

West Bengal (₹18.15 Lakh Crore)

Rajasthan (₹17.04 Lakh Crore)

Telangana (₹16.41 Lakh Crore)

Andhra Pradesh (₹15.93 Lakh Crore)

Madhya Pradesh (₹15.03 Lakh Crore)

Kerala (₹12.49 Lakh Crore)

Haryana (₹12.14 Lakh Crore)

Bihar (₹9.92 Lakh Crore)

Odisha (₹8.90 Lakh Crore)

Punjab (₹8.39 Lakh Crore)

Chhattisgarh (₹5.68 Lakh Crore)

Jharkhand (₹5.16 Lakh Crore)

Goa (₹1.21 Lakh Crore)

Conclusion

Uttar Pradesh, in the last ten years, has come a long way, and while its per capita will take another ten years to get closer to the national per capita, the current indicators give enough reasons to be bullish.

The trillion dollar dream required an ideal fiscal launchpad. Yogi has delivered just that.

This is the fifth article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state, as we have done for Gujarat and Uttar Pradesh, and how their spending patterns compare against those of its counterparts.

Further Reading:

For almost two decades now, we have been hearing about ‘The Gujarat Model’. This was the beginning of the march of the then Chief Minister Narendra Modi. When he started campaigning for the top office in the country, ‘The Gujarat Model’ was what he spoke of.

But what is the Gujarat model?

Is it the roads, or the airports, or the bullet train corridor, or the industries, or the relentless investment in asset creation? Truth be told, there can’t be a single answer, for the interpretation of the Gujarat model is subjective and anecdotal. People see what they wish to see.

This is where the fiscal metrics come to our rescue. How the state spends, where it spends, and if it spends sustainably? These are the questions we must answer, for these dictate how subsidies and salaries plague state capacity, and how asset creation suffers (or doesn’t).

In any discussion on debt, infrastructure, subsidies, and welfare, a disproportionate focus is always on the Centre. However, there are two engines in the federal framework, and this is where it becomes necessary to look at state finances, and this is exactly what this exercise is about.

Using the CAG’s State Finances 2024‑25 report, we put Gujarat head‑to‑head against every other major state on ten fiscal measures that actually decide whether a government is solvent — revenue balance, debt and total liabilities as a share of the economy, the fiscal deficit, how much it builds for every rupee it borrows, and how much of its spending is already locked into salaries, pensions, interest and subsidies before a single new promise is made.

The verdict is hard to argue with. Gujarat runs a revenue surplus while most states run deficits. It carries one of the lowest debt burdens in the country. It spends barely six paise of every rupee on salaries — the leanest wage bill in India, and it builds far more than it borrows. Measured against the field, it wins matchup after matchup. It’s like looking at the Australian cricket team of the early 2000s.

Overall, no large economy in India manages its finances with more discipline. Here’s the head‑to‑head, state by state.

Maharashtra (₹45.32 lakh cr)

Tamil Nadu (₹31.19 Lakh Crore)

Uttar Pradesh (₹29.78 Lakh Crore)

Karnataka (₹28.84 Lakh Crore)

West Bengal (₹18.15 Lakh Crore)

Rajasthan (₹17.04 Lakh Crore)

Telangana (₹16.41 Lakh Crore)

Andhra Pradesh (₹15.93 Lakh Crore)

Madhya Pradesh (₹15.03 Lakh Crore)

Kerala (₹12.49 Lakh Crore)

Haryana (₹12.14 Lakh Crore)

Bihar (₹9.92 Lakh Crore)

Odisha (₹8.90 Lakh Crore)

Punjab (₹8.39 Lakh Crore)

Chhattisgarh (₹5.68 Lakh Crore)

Jharkhand (₹5.16 Lakh Crore)

Goa (₹1.21 Lakh Crore)

Conclusion

The Gujarat Model is a testament to fiscal prudence and success. A state which other states can only hope to ape, but must attempt to.

When compared all other states in India, this is what Gujarat’s fiscal report card looks like.

This is the fourth article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state, as we have done for Gujarat, and how their spending patterns compare against those of its counterparts.

Further Reading

Borrow to invest — roads, schools, irrigation, assets that outlast the loan, and debt is an engine.

Borrow to cover running costs — salaries, pensions, subsidies, and debt is a treadmill: you borrow this year to pay for this year, and you’ll do it again next year, with interest.

By that test, a worrying number of Indian states are on the treadmill.

The combined public debt of the states has climbed 216 per cent in a decade, from ₹23.9 lakh crore in 2015‑16 to ₹75.5 lakh crore in 2024‑25, now 23.3 per cent of GDP.

Most of it is Internal Debt (market borrowing and bonds issued by the states themselves).

Still, the chart’s dark caps tell their own story: Loans & Advances from the Centre jump sharply from 2020‑21, driven by GST‑compensation back‑to‑back loans and special capex assistance.

So the stock of debt is large and rising.

Here’s where it gets uncomfortable. Compare what each state borrows, net (new debt minus repayments), against what it spends on capital in the same year. I’ve shown this in two ways — and both say the same thing.

The ratio version asks: for every ₹1 a state borrows, how much capital does it actually build?

Formally, it’s capital expenditure as a percentage of net borrowing. Above 100%, a state built more than it borrowed — borrowing went into assets.

Below 100%, capital spending fell short of borrowing, which means part of the new debt went to fund non‑asset, day‑to‑day spending.

In 14 of 28 states, the ratio is below 100%. At the bottom: Punjab at 21 per cent and Andhra Pradesh at 27 per cent. They built barely a fifth to a quarter of what they borrowed. Kerala (43 per cent) and West Bengal (38 per cent) aren’t far behind.

At the healthy end, the ratio soars — Jharkhand 1,529 per cent, Uttar Pradesh 349 per cent, Gujarat 312 per cent; these states’ borrowing is comfortably backed by building.

The diverging version says it in rupees instead of a ratio: capital expenditure minus net borrowing, the “build gap.”

A bar to the right (positive) means a state built more than it borrowed; a bar to the left (negative) means it borrowed more than it built.

The same 14 states sit on the wrong side of zero. Andhra Pradesh (−₹57,000 cr) and Tamil Nadu (−₹45,500 cr) show the widest shortfalls in absolute terms; Uttar Pradesh (+₹87,000 cr) and Gujarat (+₹47,000 cr) show the biggest surpluses.

Whichever way you cut it, share or rupees, half the country is borrowing faster than it builds.

What Should Worry You?

If borrowing isn’t going into assets, where is it going? Into the revenue deficit, the gap between everyday income and everyday spending. This is where this story becomes important.

To quote a few examples now.

Punjab spent 95 per cent of its net borrowing just covering the revenue gap. Himachal Pradesh 80 per cent, Andhra Pradesh 77 per cent, Kerala 74 per cent, Rajasthan 71 per cent, West Bengal 67 per cent, Haryana 63 per cent, Tamil Nadu 44 per cent.

Eight states pour more than 40 paise of every borrowed rupee into yesterday’s bills.

That is the treadmill, in numbers. These states aren’t borrowing to lay roads; they’re borrowing to make payroll and pay subsidies, and the interest on that debt then becomes next year’s running cost, which needs more borrowing. It compounds.

Debt itself isn’t the villain. There is good debt and bad debt.

Gujarat and UP borrow and build, and that’s exactly what borrowing is for. The danger is purposeless debt: loans that finance consumption, leave no asset behind, and quietly raise the interest bill forever. On that measure, nearly half of India’s states are borrowing not to build their future, but to breathe through their present.

This is the third article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state and how its spending patterns compare against those of its counterparts.

Part I and Part II can be read here.

It's rather unfair that bureaucrats and ministers get a head start when it comes to the real estate and market prospects, given that they are directly involved in policymaking.

Let their affidavits be a public record, accessible to every citizen, uploaded on a website.

This should also include their immediate family members: spouse, children, grandchildren, parents, and even grandparents.

Some call the economy dead, but remain invested in the stock market. Some pick up land in areas marked for development. Unfair to the citizens. Yes?

Yes, it makes for great television, which I can claim for personal experience, but it also misses where the money actually goes. This is where the CAG report offers some urgent wisdom.

Fun Fact: Of every rupee a state spends, roughly 61 paise is already committed before a single new scheme is announced, locked into salaries, pensions, interest, subsidies and grants. Our state governments have commitment issues, really.

Now, let’s look at the state-wise breakdown.

Government wages are the foundational cost of running a state, and they have climbed 111% in a decade, to ₹7.7 lakh crore, about 15 per cent of all state spending.

But the burden is wildly uneven. Hill and north-eastern states, with thin economies and large administrations, top the table: Nagaland spends 37 per cent of its budget on salaries, Himachal and Manipur, nearly 29 per cent.

At the other end, the big industrial economies run lean ; Gujarat (6.3 per cent) and Karnataka (6.6 per cent) spend the smallest share in the country. A low salary share isn't necessarily a virtue (it can mean services are delivered through grant-funded bodies instead), but it leaves far more room to build.

This is why India’s youth loves government jobs (or at least considers them as an option at some point in their lives). The pensions. The guarantee is that once you retire, a certain sum will be credited to your bank account each month. Let’s break down the cost of this guarantee.

Nationally, the pension bill has grown 160 per cent to ₹5.2 lakh crore. The states most exposed are those with older workforces and pre-reform pension commitments: Himachal Pradesh (19.6 per cent), Kerala (16 per cent) and Punjab (15.2 per cent)spend the most.

Every one of those paise is spoken for decades in advance, and the recent drift back toward the Old Pension Scheme in several states means this line is set to grow, not shrink.

Watch out for Himachal Pradesh, though. The 28 per cent allocation to salaries and 19 per cent to pensions, and the Congress thought delaying them would not have a political cost. We will come back to this data in December 2027. Rest assured.

This is where the outrage is concentrated, but here is the bad news. Most states do not have a monthly cash transfer programme, so if you are one of those who believe that cash transfers are going to be the cause of a fiscal earthquake at some point, you are incorrect. It’s like blaming an MSME in Delhi for the annual pollution fest (which is what we do, since it’s the easier thing to do).

However, this is the fastest-growing spend, up 214 per cent over a decade to ₹4.4 lakh crore. And it's concentrated: Karnataka (14 per cent), Madhya Pradesh (13.7 per cent), Tamil Nadu (13.6 per cent) and Punjab (13.5 per cent) lead, while ten states spend under 2 per cent.

The freebies argument is not incorrect, but foolishly incomplete, since they remain a fraction of what states pay in wages, pensions and grants. The outrage is aimed at the smallest target.

If you ever felt guilty about piling up interest on your credit card bills, this statistic will offer some relief. The state governments are not very different, and most of their interest payments (on debt) are not going towards asset creation. We’ll discuss this in another analysis later on, but for now, let it be known that beyond salaries, pensions, and subsidies, a silent JCB is digging up through the states’ finances—the interest payments.

The payment has grown 160 per cent in a decade to ₹5.5 lakh crore, about 11 per cent of all spending. This line maps almost perfectly onto fiscal stress: Punjab spends 18.5 per cent of its budget servicing debt, nearly one rupee in five, trailed by Haryana (17.1 per cent), Kerala (16.8 per cent) and West Bengal (16.5 per cent).

By the time this spending is over, states like Punjab will have already spent 80 per cent of their budget.

The largest object head in state budgets is the one almost nobody names. Grants-in-aid run to ₹11.7 lakh crore — about 23 per cent of all state spending, more than salaries and subsidies combined.

These are transfers states hand to local bodies, universities and aided institutions, and a big chunk of it goes to pay their staff. In other words, much of this is payroll by another name, just routed off the state's own books. West Bengal (42 per cent), Maharashtra (38 per cent), and Telangana (34 per cent) lean on it most.

Now, this is where the privatisation debate becomes important. Why do state governments still run tourism corporations, to give one example?

Until when should the state sponsor universities where the majority of the students are pursuing programmes that are not creating any employment prospects in this day and age?

A debate for another day, perhaps.

This is the second article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state and how its spending patterns compare against those of its counterparts.

Salaries, pensions, and interest have swallowed 42–45% of every rupee of revenue for 10 straight years. Fold in subsidies and salary grants, and 61 paise of every rupee is committed before a single service is delivered. The ratio has barely moved in a decade — this is structural, not a bad year.

The Cherry on the Cake: Subsidies

On top of the unavoidable commitments, states pile on voluntary ones. Subsidies hit a decade-high 10.24% of revenue in 2024-25 and are up 214% in ten years — more than double the pace of capital spending. The revdi habit, quantified.

The Cost of Commitment

Committed spending hasn't just stayed high — it has grown ~10% every year for a decade, peaking at 15.9% in 2017-18. Each year, the locked-in base grows, leaving less and less room to manoeuvre.

Capital Expenditure, For Those Who Really Care

Total spending ballooned 131% over the decade, but capital spending grew only 104% — so the slice that actually builds roads, schools and assets keeps shrinking, from 18.8% to 16.6% of the budget. More money, less to show for it.

An Overview of the States and how they Spend

Fourteen of 28 states spend over half their revenue on salaries, pensions and interest alone — led by the hill and special-category states (Nagaland ~74%), with big states like Maharashtra (~29%) at the other end.

We are going to deep dive into states’ performance in another analysis.

When Commitment Compounds

Add the grants states hand out to pay other bodies' salaries, and the picture darkens: 20 of 28 states cross 50%. For Uttar Pradesh, Maharashtra and West Bengal, this hidden line adds 15-plus percentage points.

This is the first article in a series of analyses on State Finances 2024-2025. In the upcoming articles, we’ll deep dive into the fiscal health of each state, and how their spending patterns compare against their counterparts.

The total votes were 81. Congress-JMM's strength was 56. NDA’s strength was 24. Two seats were vacant, and to qualify, the winner required 28 votes. In an ideal world, Congress and JMM should have been able to elect their two candidates to the Rajya Sabha, but eventually, you had the JMM and NDA candidates securing a win.

Yes, the alliance the Congress is a part of, which also includes MLAs from RJD and a communist party, cross-voted in favour of the NDA candidate. Rahul Gandhi is busy counting likes on social media while his alliance isn’t counting its numbers properly.

Permutation 1

The 240 BJP MPs are supported by

• 28 MPs of JDU+TDP

• The other 25 MPs of the NDA from smaller parties

• YSRCP+SAD come forward with their 5 MPs

• NCPI’s 20 MPs are definitely coming on board

• 22 MPs of the DMK (issue-based support, since they are getting the proportional increase they always wanted)

• 4 Independents

• 1 from ZPM (Zoram People’s Movement (can be trusted for issue-based support)

• 6 MPs from SS(UBT)

This takes the final number to 351. Even if we add 3 from JMM, it still leaves 7 short, but we are also assuming a full house with zero abstentions. A few abstentions, and this will take the BJP to its target. The most pragmatic option.

Permutation 2:

The 240 BJP MPs are supported by

• 28 MPs of JDU+TDP

• The other 25 MPs of the NDA from smaller parties

• YSRCP+SAD come forward with their 5 MPs

• NCPI’s 20 MPs are definitely coming on board

• 4 Independents

• 1 from ZPM (Zoram People’s Movement (can be trusted for issue-based support)

• 6 MPs from SS(UBT)

BUT, DMK abstains, and this brings down the required number to 346. Even then, the NDA is 17 short. Add the 3 MPs of JMM, and it’s still not good enough. A lot many will have to abstain for this permutation to work.

Permutation 3

What if the Samajwadi Party decides to abstain, and DMK comes on board?

• 28 MPs of JDU+TDP

• The other 25 MPs of the NDA from smaller parties

• YSRCP+SAD come forward with their 5 MPs

• NCPI’s 20 MPs are definitely coming on board

• 22 MPs of the DMK (issue-based support, since they are getting the proportional increase they always wanted)

• 4 Independents

• 1 from ZPM (Zoram People’s Movement (can be trusted for issue-based support)

• 6 MPs from SS(UBT)

351 is the final number here. 336 was the required number. Easy win for the NDA. But will the Samajwadi Party abstain?

Permutation 4: The Most Likely Scenario

What if any 4 MPs choose to abstain? We know two Independents who might not be present in the Lok Sabha, but if the number rises to 4?

• 28 MPs of JDU+TDP

• The other 25 MPs of the NDA from smaller parties

• YSRCP+SAD come forward with their 5 MPs

• NCPI’s 20 MPs are definitely coming on board

• 22 MPs of the DMK (issue-based support, since they are getting the proportional increase they always wanted)

• 4 Independents

• 1 from ZPM (Zoram People’s Movement (can be trusted for issue-based support)

• 6 MPs from SS(UBT)

• 8 MPs from Sharad Pawar’s camp. Purely issue-based support, hoping to revive the party in old pockets, and eventually, the state.

Takes the total to 359, and four abstentions is a conservative figure to assume. It’ll be touch and go, but it will be enough.

Further Reading

The instinct across the regional bloc was that this was a defeat for the NDA. It was not. Delimitation does not disappear because one bill failed; the 84th Amendment froze the exercise only until the first census after 2026, and the freeze is now nearly spent.

The question was never whether the map gets redrawn. It is on what terms, and who is at the table when it happens. It was never a question of 'if but when.

That is the calculation regional parties have been getting wrong. The reflexive opposition treats delimitation as a gift to the BJP.

Read the seat arithmetic carefully, and the opposite is closer to the truth: the parties with the most to lose from a frozen 543-seat house are not national at all. They are the regional outfits now staring at an existential squeeze.

My analysis makes the case that the DMK, the newly minted NCPI with 20 of the MPs from TMC, the Samajwadi Party, the two NCPs, the RJD, the Akali Dal and even the AIMIM have a self-interested reason to want the 131st passed — and that the timing has never been better for them than now. Six of the Shiv Sena (UBT) MPs have already committed themselves to the NDA.

What has changed since April? Well, a lot.

Two of the largest regional players have just been wounded at home. Together, they had 42 MPs in the Lok Sabha. One party has been duped by its junior alliance partner, and one party witnessed its juniors dumping the leadership.

42 potential lame ducks, to begin with. Add Maharashtra’s MPs, and the count goes to 59. 26 of the 59 MPs have already aligned with the NDA.

The DMK and TMC went into the last delimitation debate believing they could hold out. They cannot any longer. A bloc negotiating from weakness behaves very differently from one negotiating from a position of comfort — and that is precisely why the politics of the 131st is alive again.

More seats, mechanically, means more MPs

On the floor of the House, the Home Minister committed to a proportional increase — roughly 1.5 times the existing strength of every state — rather than a population-based reapportionment. That distinction is the entire ballgame. The first-order consequence is straightforward: every state gets more seats.

West Bengal moves from 42 to 63. Gujarat from 26 to 39. Kerala from 20 to 30. The national house expands from 543 to roughly 820.

For a party with a committed, geographically concentrated vote base, more constituencies are not a neutral development — they are an opportunity, because the average number of electors per constituency falls.

Smaller constituencies reward parties whose support is dense and local rather than thin and national. The regional party’s core asset — a loyal vote that turns out within a defined territory — becomes more decisive, not less, as the unit shrinks.

The arithmetic that scares regional parties is, on inspection, arithmetic that favours them.

The South’s penalty fear dissolves

The sharpest historical objection to delimitation came from the South, and it was not unreasonable.

The southern states industrialised, controlled their population growth, and — through the devolution formula — effectively subsidised the poorer, faster-growing states of the North.

A population-based delimitation would have punished them for exactly that success, transferring seats from Chennai and Bengaluru to Lucknow and Patna. The fear of being penalised for good governance was the bedrock of southern resistance.

That is exactly why Home Minister Amit Shah was willing to go as far as bringing an amended version of the draft bill within an hour, with a clause for proportional increase. Bluff or bridge, the opposition missed the trick that evening.

Every state rises by the same multiple; no state’s relative weight collapses. The South does not lose power — it retains its share and gains absolute seats. This is the argument a regional party can actually sell to its voters: not ‘we surrendered to Delhi,’ but ‘we secured more MPs for our state without ceding ground to the North.’ This narrative will be critical for the DMK in 2029, assuming they come onboard.

The vote-value comparison makes the point visceral.

An average southern voter today already carries more weight per ballot than a northern one because of the freeze.

Proportional delimitation preserves that structural advantage rather than erasing it. Framed this way, the South is not defending itself against delimitation — it is protecting a position it already holds.

For family-led parties, more seats are a survival mechanism

More MPs mean more representation. They also mean more relevance, and relevance is the scarcer commodity for India’s regional parties, almost all of which are organised around a single family.

The DMK, the RJD, Sharad Pawar’s NCP, Badal’s SAD, and Akhilesh Yadav’s Samajwadi. Party — each is vulnerable to the generational cycle in a way a cadre-based national party is not.

One or two bad elections can threaten not just a term in office but the survival of the organisation itself. The recent local body elections would have reminded Sharad Pawar’s NCP of that vulnerability. Mamata Banerjee, however, learned her lesson by losing the party altogether.

A larger Lok Sabha footprint is a buffer against that fragility.

More seats give these parties a platform to stay nationally visible between state cycles, to keep building cadre, and to keep returning to voters with a record. And because they are regional, they benefit disproportionately from the first-past-the-post mechanics that smaller constituencies produce.

As constituency size falls and a regional party remains a serious player, contests tend to fracture into three- and four-cornered fights, as they did in pockets of Uttar Pradesh and West Bengal, and repeatedly in Jharkhand.

In a fragmented field, the party whose voters know it best and trust it most on the ground wins on lower vote shares. That is structurally the regional party, not the national one. That is one reason why the tribal vote in Jharkhand doesn’t go to the BJP even today.

Lok Sabha seats convert into state-level political capital

This is where the longevity argument hardens into something more durable than survival.

A larger national presence is not just visibility; it is political capital — cadre, resources, bargaining weight — that a regional party can redeploy in its state elections.

A party that is irreplaceable in the Lok Sabha math of a state becomes irreplaceable in that state’s coalition math too. It stops being the junior partner a national ally can sideline and becomes the partner without whom government cannot be formed.

Crucially, this capital outlives the founder. The family builds the party; the seats institutionalise it.

This is where the regional parties must think long-term. Not 2029, but 2039, and beyond. If you are Arvind Kejriwal, why would you object to more seats in Punjab in the Lok Sabha?

Cadre energised and funded through an expanded Lok Sabha presence is what allows a regional outfit to keep contesting and winning after the founding leader is gone.

Delimitation, in other words, does not merely extend the life of these parties — it changes the incentive structure of party-building itself, giving them a path to exist beyond the family.

The state-by-state ledger

The DMK, with 22 MPs, is the single most consequential vote on the 131st — and the most exposed. After the TVK’s breakthrough and Stalin’s personal defeat, the DMK in 2029 is staring at a genuine rout. More seats are precisely what a party facing a rising dominant force needs to avoid eradication.

The NCP (Sharad Pawar) faction, squeezed in a Maharashtra dominated by the BJP and the rival NCP, gets a route back into the Lok Sabha game in and around its western Maharashtra base, assuming they can make something of it.

The RJD in Bihar and the Samajwadi Party in Uttar Pradesh both sit on a near-guaranteed Muslim-Yadav base; for them, more seats mechanically lock in relevance. If UP rises to 120 seats, Akhilesh Yadav starts as favourite in at least a third of them , roughly 40, before a vote is counted.

The Shiromani Akali Dal, down to a single MP, has nothing to lose and a base to rebuild.

And the AIMIM is the most interesting case: a larger, more granular map of Muslim-dominated constituencies is exactly the terrain on which Asaduddin Owaisi can attempt to become the dominant Muslim force nationally.

That is the politics the party already runs; delimitation hands it more board to play on. Fun Fact; Owaisi has never won more than 2 seats, and never contested more than 15 (2024). Delimitation could make him a frontrunner in at least a dozen seats, and I am being conservative here.

The communists have their reasons to be optimistic too. There are constituencies where these relics still are of some value, and delimitation might just open up a new market for them to find people who are willing to squander their lives. Put together, the Communist parties have 8 MPs.

The regional parties are scared for the wrong reasons

The honest objection from these regional parties is that the BJP gains too, and that a larger house entrenches a dominant national party. That fear is legitimate. It is also beside the point.

The BJP is in an advantageous position at 543 seats; its winning prospects do not depend on the house expanding to 820. The saffron party is starting at least 30 seats from West Bengal in 2029, and even if they score 60 out of 120 seats in Uttar Pradesh and Bihar, they’ll still be in play.

The regional parties’ existential crisis, by contrast, depends very much on the seats staying frozen.

The choice in front of the DMK or SAD or NCP(SP) or SP is not ‘delimitation that helps us versus a status quo that helps us.’ It is a slow decline at 543 versus a fighting chance at 820. The BJP wins either way; the regional bloc only wins under one of them.

Turns out, this is where the 20 MPs of NCPI may have made their choice. This is where the 6 MPs of SS(UBT) have made the jump. If the party leadership prioritises its ego, the parliamentarians will pick their long-term interests. To each their own.

There is a second actor quietly hoping the regional parties vote no: the Congress.

The Congress has long cast itself as the national pole that lets regional parties leap from the assembly to the Lok Sabha, a ladder the regionals are supposed to need.

A larger Lok Sabha breaks that dependence. With more seats of their own, regional parties can bargain against the Congress rather than shelter behind it, and they can force the Congress to actually perform in the states where it faces the BJP one-on-one: Madhya Pradesh, Rajasthan, Chhattisgarh, Gujarat, Haryana, Uttarakhand, Himachal, and Karnataka.

The Congress would much rather the regionals stay small and dependent. That, more than any principled objection, is what its opposition to the 131st is really about.

Delimitation is coming regardless. It’s a constitutional inevitability.

The regional parties can arrive at that table wounded after the next census, when the NDA is calling every shot, or they can shape the terms now, while a proportional formula is on offer and their votes still carry weight.

The 131st was never the BJP’s lifeline. It was for the regional parties, I’d argue, but only if the regional parties are willing to look beyond that one family, towards the next generation.

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