Governments generally resort to borrowings for any shortfall in meeting their expenditure. The share of borrowings in the total expenditure varies from state to state as the nature of their receipts is different. The common trend witnessed across the states is an increased reliance on borrowings during the pandemic. Governments incur various expenditures in the form of salaries, pensions, subsidies, schemes, investments in infrastructure, and other operational expenditures. The expenditure is met through the revenue generated from various sources like taxes, grants, and non-tax expenditures like royalties among other things. The annual budget documents provide details of the estimated expenditure for the year and the expected revenue to be generated. Any shortfall in the revenues is usually met through borrowings from various sources. Governments also make provisions for borrowings in the annual budgets. Various factors influence the expenditure incurred and the revenue generated, which in turn influence the extent of borrowings made by the government. Relying on borrowings to meet the expenditure is not sustainable as they are a liability for the future. However, borrowings cannot be seen as an isolated number but from the perspective of GSDP growth and the state’s capacity to repay, in addition to the assets being built with such borrowings. Borrowings by themselves do not convey any substantial trend. In an earlier story, we highlighted that the central debt, as well as the borrowings of the States, have increased during the pandemic. The reliance on borrowings to meet the expenditure varied across the states. In this story, we look at data related to borrowings of the States over the past five years (2017-18 to 2021-22) and analyse the trends. Methodology: Information available in ‘Accounts at Glance’ reports submitted by the respective states to the Comptroller & Auditor General (CAG) is considered for analysis. These reports are for the four-year period 2017-18 to 2020-21. For the recently ended 2021-22, we have considered the data from “Monthly Key Indicators”. For those states where the ‘Accounts at Glance’ reports were not available for a particular year, ‘Monthly Key Indicators’ reports were considered. Actuals under the head ‘Borrowings & Other Liabilities’ are considered as ‘borrowings’ in the story. Actual expenditure is being considered for ‘Actual budget expenditure’ For purpose of categorization, five-year cumulative data (2017-18 to 2021-22) is being considered. The states are categorised based on the ratio of Borrowings compared to the ‘Actual Budget Expenditure’ (ABE) Goa, Delhi & Puducherry are not considered for analysis as the data is not available with CAG. However, it has to be noted that the actual amount of borrowings as shown in the budget documents may not include off-budget borrowings or off-budget financing that are generally financed through Government-owned or controlled public sector enterprises or departmental commercial undertakings, which raise the resources through market borrowings on behalf of the Government. In Tamil Nadu, Telangana, Kerala & Haryana, the pandemic has further increased an already higher share of borrowings As per the five-year cumulative data (2017-18 to 2021-22), more than 25% of their actual expenditure (ABE) was met through borrowings & other liabilities in the case of five states. These states include Haryana, Tamil Nadu, Telangana & Kerala along with the northeastern state of Nagaland. In the case of the four large states, the share of Debt was already high prior to the pandemic, which further increased during 2020-21. In 2019-20, the portion of borrowings in the case of Haryana was 29%, which increased to 30.2% in 2020-21. It slightly reduced in 2021-22. Tamil Nadu & Telangana had an increasing trend of a higher share of borrowings between 20-25% which increased to 32% & 34% for Telangana & Tamil Nadu respectively in the pandemic year of 2020-21. In the case of Kerala, the state was showing a year-on-year improvement in reducing the share of debt, but the trend was reversed in 2020-21, with the share increasing to 29.5%. The higher cumulative share of Nagaland can be attributed to the pandemic. Prior to the pandemic, the state’s reliance on borrowings was around 6.5%. But in 2020-21, it increased to 45.9%. The state has yet to recover, with the debts still accounting for 37.7% of the state’s means to meet the expenditure. A.P, Karnataka & Rajasthan reduced the dependence on borrowings in 2021-22 The five-year cumulative value of 6 states shows that they met around 20-25% of ABE through borrowings.