With the recent focus on bad debts of commercial and state banks, we thought it was a good time to look at the outstanding liabilities of different Indian States. Largely, the trend seems to be that the overall outstanding debt of Indian states is reducing. However, a few key states that stand out are Tamil Nadu, Jammu and Kashmir and Nagaland. Bihar and Mizoram are probably two which have shown the largest improvement over the years. Bihar's staggering GSDP growth in the past few years has probably helped it lower it's debt percentage.
Many large states like Maharashtra, Karnataka and Tamil Nadu are accumulating debt at a fast rate - which is represented by a flat or upwards trending tail on the chart, given the fast growth those states have seen in the past years.
Please note that this chart shows a percentage of the state GSDP. In case of Maharashtra which has the highest GSDP of Rs. 1,476 thousand crore, the 2014 outstanding liabilities were Rs. 265 thousand crores which is larger than the GDP of 15 Indian states in that year and also larger than the GDP of the seven North Eastern states put together in that year.