An Analysis of Fiscal Dynamics and their Impact on Economic Development in Chhattisgarh: A Study of Trends from 2001-2002 to 2024-2025

This research paper presents an in-depth analysis of Chhattisgarh’s fiscal dynamics over the period 2001–02 to 2024–25, assessing the trajectory of the state’s finances and their implications for economic development. Using comprehensive data on GSDP, government receipts and expenditures, the study explores the evolution of fiscal and revenue deficits as both absolute values and as a share of GSDP. The analysis uncovers that while Chhattisgarh's GSDP has experienced substantial growth since statehood, recent fiscal years are marked by rising revenue and fiscal deficits, substantially exceeding the prudential benchmarks set by the Fiscal Responsibility and Budget Management (FRBM) framework for Indian states.The study establishes several critical findings: significant revenue deficits in recent and projected years highlight increasing reliance on borrowing to fund current (consumption) expenditures instead of capital formation, raising sustainability concerns. Fiscal deficits persistently breaching the 3% of GSDP guideline signal elevated fiscal stress and risk crowding out future development expenditure due to growing debt servicing obligations.