Lucknow: Uttar Pradesh’s rising debt burden has become a matter of concern even as the state reports significant growth in infrastructure and industrial development. According to official estimates, the state’s outstanding debt is expected to touch Rs 9 lakh crore in the 2025-26 fiscal, up from Rs 5.64 lakh crore in 2020-21.
This translates into a debt load of nearly Rs 37,500 per citizen in the state.
Officials argue that higher debt is not necessarily a negative indicator. “Rising borrowings also point towards increased spending on roads, electricity, education, and health infrastructure. What matters is the transparency of expenditure and a clear repayment plan,” a senior finance department official explained.
Despite the mounting liabilities, the state government insists that its fiscal discipline remains intact. The estimated fiscal deficit for 2025-26 stands at Rs 91,400 crore, which is about 2.97 percent of the Gross State Domestic Product (GSDP). This figure remains well within the 3 percent limit prescribed by the Reserve Bank of India (RBI).
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Fiscal deficit represents the gap between a government’s total expenditure and its revenue, excluding borrowings. Economists caution that while a controlled deficit is not harmful, unchecked borrowing can add to repayment pressure and rising interest payouts.
The opposition parties have seized on the rising debt figures to criticise the Yogi Adityanath government. Samajwadi Party spokesperson Rajendra Chaudhary said, “The BJP government boasts about development, but the truth is every citizen is being pushed into debt. They are mortgaging the state’s future to claim short-term political credit.”
Congress leaders too questioned the government’s fiscal management. “If the economy is growing as the government claims, why are borrowings rising at this pace? This shows financial mismanagement and misplaced priorities,” said state Congress leader Ajay Rai.
The ruling BJP, however, defended the borrowings. “Every rupee of debt is being invested in building infrastructure, expressways, metro rail projects, power supply, and welfare schemes. These are long-term assets that will generate jobs and revenue. Unlike past governments, we are spending with accountability,” BJP MLA Neeraj Bora said.
Experts believe that Uttar Pradesh, given its size and development needs, must carefully manage its debt profile. “The challenge for UP is to strike a balance—leveraging loans for growth while ensuring that interest payments do not eat into development expenditure,” said an economist from Lucknow University.
The state government, meanwhile, highlights the doubling of the budget size in the last five years as evidence of economic expansion and growing fiscal capacity.
Debt growing year-on-year
Data from the State Finance Commission shows a consistent rise in borrowings over the past five years:
2020-21: Rs 5.64 lakh crore
2021-22: Rs 6.21 lakh crore
2022-23: Rs 6.71 lakh crore
2023-24: Rs 7.76 lakh crore
2024-25: Rs 8.46 lakh crore
2025-26 (estimate): Rs 9.03 lakh cr
