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RBI Releases Report on "State Finances: A Study of Budgets of 2025-26".

Banking & Finance | Dated: 16 Jan 2026

The Reserve Bank of India (RBI) released its annual report titled "State Finances: A Study of Budgets of 2025-26". The report highlights that the fiscal health of states has improved, with the consolidated Gross Fiscal Deficit (GFD) to Gross Domestic Product (GDP) ratio declining to 2.8%, staying within the prudent limit.

🎯 Key Highlights:

States are prioritizing capital expenditure (Capex) to boost infrastructure.
The report advises states to revert to the Old Pension Scheme (OPS) with caution due to long-term fiscal burdens.
It emphasizes the need for states to increase non-tax revenue collections.

💡 Other Important Facts:

Report: State Finances.
Publisher: RBI.
Finding: GFD/GDP ratio at 2.8%.

📚 Test Your Knowledge:

According to the RBI report on State Finances, the consolidated Gross Fiscal Deficit of states is within which percentage of GDP?

Correct Answer: 2.8%

🚀 Quick Recap:

About RBI

Governor – Shaktikanta Das
HQ – Mumbai