Rajasthan Debt May Exceed ₹8 Lakh Crore by FY 2026-27 End; Budget Review Proposed

The news

Rajasthan's total debt is expected to exceed ₹8 lakh crore by the end of the current financial year, the Akhil Rajya Trade and Industries Association (Aratia) said on 14 November 2026. The association, which held a meeting on the state's forthcoming budget, estimated existing borrowing at ₹7.65–7.70 lakh crore and said the fiscal deficit and debt burden are rising by ₹7,500–8,000 crore every month despite a steady increase in tax revenue.

To address the situation, Aratia has proposed the creation of a budget preview and review task force. The proposed body would include one Member of Parliament, two Members of the Legislative Assembly, representatives from industry and trade, and two budget experts and analysts. The association said the task force should work under constitutional oath and obligations, hold monthly meetings to review the previous month's government expenditure against budget provisions, and assess whether the spending is delivering useful outcomes. It also recommended identifying unproductive expenditure for elimination and making arrangements in the budget for repayment of old debt.

What are the constitutional limits on state borrowing in India?

The Constitution of India empowers state governments to borrow only within limits set by the state legislature. Article 293(1) allows a state to borrow upon the security of its Consolidated Fund, subject to any limits that the state legislature may fix by law. Article 293(3) further requires the state to obtain the consent of the central government before raising any loan if the state still has an outstanding loan from the centre or a loan guaranteed by the centre. The Fiscal Responsibility and Budget Management Act, enacted by Rajasthan in 2005, set targets for the state to reduce its fiscal deficit and manage its total debt. The Twelfth Finance Commission had recommended that states adopt such fiscal responsibility legislation to ensure long-term debt sustainability.

What is the current budget process in Rajasthan?

According to the association, the state government currently holds pre-budget meetings where selected representatives of industrial and trade organisations are formally heard. After these meetings, officials of the Finance Department prepare the budget. Aratia argued that while preparing the income-expenditure budget is important, a structured preview before the budget and a review after it are equally critical.

What has the association proposed and why?

Aratia proposed a task force to conduct both a budget preview and a monthly review. During the preview, the task force's suggestions would be analysed and effectively implemented. Monthly reviews would examine whether spending follows budget provisions and whether public money is being used usefully. The association said many expenditure items have no productive use or direct public-interest connection and should be identified and eliminated. It also questioned the state's borrowing system, noting that the government takes fresh loans every month without an effective provision to repay old borrowing, and recommended that the budget include arrangements for repaying old debt to reduce the total borrowing size.