Mumbai, Jan. 23 -- Reserve Bank of India (RBI) has released the Report 'State Finances: A Study of Budgets of 2025-26'. The theme of this year's Report is 'Demographic Transition in India - Implications for State Finances'. It provides a comprehensive assessment of the finances of State governments for 2025-26 against the backdrop of actual and revised/provisional accounts for 2023-24 and 2024-25, respectively.

The paper noted that states consolidated gross fiscal deficit increased to 3.3 per cent of gross domestic product (GDP) in 2024-25, after remaining below 3.0 per cent during the previous three years. The deficit exceeding 3 per cent mainly reflects 50-year interest free loans from the Centre under Special Assistance to States for ...