New Delhi, Dec. 31 -- India's states entered FY24 with stronger revenue inflows but ended the year under mounting fiscal stress, as rising debt and fixed spending commitments eroded fiscal flexibility, the Comptroller and Auditor General of India (CAG) said. More than half of their revenue expenditure was locked into salaries, pensions, interest payments and subsidies, limiting room for investment or shock absorption despite improved collections, according to the State Finances 2023-24 report.

The second edition of the publication, released by CAG K. Sanjay Murthy, presents a consolidated and audited assessment of the finances of all 28 states, allowing comparisons across states and over a decade from FY15 to FY24.

The report shows tota...