The Shiv Sena (Uddhav Balasaheb Thackeray) on Thursday, 18 June issued a sharp warning over the nation's deteriorating public finances, citing the Comptroller and Auditor General of India (CAG)'s latest report, which reveals that all 28 states — including Maharashtra — are ensnared in a deepening debt trap. The party described the findings as 'deeply shocking' and called for urgent course correction.

What the CAG Report Reveals

According to the CAG's 'Finance 2024-25' report, the combined debt of all Indian states has ballooned from ₹31 lakh crore to ₹90 lakh crore over the last ten years — nearly a threefold increase. The combined budgetary expenditure of all states stands at ₹51.20 lakh crore, while their total debt is approaching ₹100 lakh crore. The Centre itself carries a debt burden of approximately ₹200 lakh crore, according to the editorial.

Shiv Sena(UBT)'s Charge: Populism Over Prudence

Writing in the party's mouthpiece 'Saamana', the Thackeray camp argued that fiscal indiscipline and a pattern of funding populist election schemes from state treasuries have pushed governments deeper into debt with each passing year. 'Fiscal indiscipline and the tendency to squander state treasuries on populist schemes to win elections have pushed state governments deeper into a debt trap day by day,' the editorial stated. The party invoked a common proverb — 'Celebrating a festival by taking out a loan' — to characterise what it described as the prevailing governing philosophy across party lines.

Revenue Deficit Across 15 States

The editorial highlighted that 15 states — including Maharashtra, Karnataka, Bihar, Assam, Haryana, Himachal Pradesh, Telangana, and Chhattisgarh — are collectively carrying a revenue deficit of ₹3.46 lakh crore. The Thackeray-led party argued that the combination of shrinking revenues, extravagant expenditures, and the compulsion to service existing debt by taking fresh loans has effectively ground the economic wheels of most states to a halt.

Centre and States in a 'Race to Borrow'

Notably, the editorial did not spare the Centre, arguing that instead of enforcing fiscal discipline on states, the Union government has itself joined what it called a 'race' to accumulate debt. With taxpayer money increasingly absorbed by interest payments, the party questioned what remains for actual development spending. 'The hard-earned money collected from taxpayers is going to be spent entirely on servicing interest; what is the future of our nation?' the editorial asked. This critique lands at a time when multiple states — governed by parties across the political spectrum — have expanded free-scheme commitments ahead of elections.

CAG Credited, But Warning Issued

Despite its criticism of the political class, the Shiv Sena (UBT) credited the CAG for presenting an 'unvarnished picture' of the states' financial health. 'At a time when no Central institution seems to be functioning completely autonomously, the CAG must be thanked for presenting a report that unmasks the true financial status of the nation's states,' the editorial noted. The party warned that without a decisive shift in fiscal behaviour, the country's economic foundations risk irreversible damage.