A revenue deficit is when expenditure on recurring items such as salaries, pensions, subsidies, and interest payments exceed the revenue earned from regular sources such as taxes and fees. (Representational image)
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The Ministry of Finance has warned that States with revenue deficits and high debt burdens will find it harder to deal with fiscal shocks, including from the current crisis, leading to them either reprioritising expenditure away from productive areas, or approaching the Centre for more funds at a time when it is trying to consolidate its own finances.
In its Monthly Economic Review (MER) for April 2026, the Department of Economic Affairs in the Ministry of Finance, said that nine of the 18 large States it has analysed were in revenue deficit as per their own projections for 2026-27. Seven States are projected to be revenue surplus, while one is in revenue balance.
Published – April 30, 2026 01:30 pm IST
