States with lower levels of debt are spending more on social-sector segments, such as education, healthcare, etc. The National Capital Territory of Delhi tops the list, with such spending accounting for 55.4% of its total outgo and its debt level at 2.2% of the GSDP, the lowest for all states.
In contrast, Punjab’s social sector spending accounts for 29% of its total—the lowest—while its debt level, at 48% of the GSDP, is one of the highest. However, Tamil Nadu is an exception as its debt is 32% of the GSDP and its social sector spending is 33% of its total expenditure. All states increased their social sector spending during the pandemic. It is likely to rise to Rs 21.8 trillion in FY23 (BE), or 42% of the total, from Rs 14.1 trillion, or 40% in FY20.