FISCAL SUSTAINABILITY OF HARYANA: AN ANALYSIS OF DEBT, DEFICIT AND FISCAL RESPONSIBILITY

Fiscal sustainability is crucial for maintaining macroeconomic stability and supporting long-term economic development. This study examined the fiscal sustainability of Haryana by analysing key indicators such as the debt–GSDP ratio, fiscal deficit, revenue deficit, and interest payment burden during the period 2000–2024. The findings show that while Haryana experienced strong economic growth during the study period, rising expenditure commitments and increasing public debt have created growing fiscal pressures. The analysis indicates that fiscal consolidation improved the state’s fiscal position during the mid-2000s, particularly after the implementation of fiscal responsibility legislation. However, in recent years fiscal challenges have increased due to higher revenue expenditure, welfare commitments, and economic shocks such as the COVID-19 pandemic. The rising debt–GSDP ratio and interest payments suggest that a considerable portion of government revenue is used for debt servicing. The econometric results also show that fiscal deficits contribute significantly to the growth of public debt, indicating the importance of maintaining fiscal discipline. Overall, although Haryana’s fiscal position remains manageable, long-term sustainability will require stronger revenue mobilization, efficient expenditure management, and prudent debt policies to maintain a stable fiscal path.

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