TestCloud
Prep • Practice • Perform
Log In

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

Banking & Finance | Dated: 24 Dec 2025

The Reserve Bank of India (RBI) released its annual report "State Finances: A Study of Budgets of 2025-26". The report reveals that the gross fiscal deficit (GFD) of states is budgeted to decline to 3.1% of Gross State Domestic Product (GSDP) in 2025-26, from 3.5% in the previous year. It emphasizes prudent fiscal management by states.

🎯 Key Highlights:

  • The report warns against the reversion to the Old Pension Scheme (OPS) by some states, citing long-term fiscal risks.
  • Capital expenditure by states is projected to grow by 18.2%, aiding infrastructure development.
  • States are advised to focus on improving non-tax revenue mobilization.

💡 Other Important Facts:

  • Report: State Finances: A Study of Budgets.
  • Fiscal Deficit Target: 3.1% of GSDP.
  • Key Warning: Risk from OPS.

📚 Test Your Knowledge:

What is the projected Gross Fiscal Deficit (GFD) of states for 2025-26 as per the RBI State Finances report?

Correct Answer: 3.1% of GSDP

🚀 Quick Recap:

About RBI

  • Governor – Shaktikanta Das
  • HQ – Mumbai