The June 2025 investment figures reveal a diverse fiscal landscape among Indian states and UTs.
States Strengthen Fiscal Discipline with Reserve Funds and Government Securities
MUMBAI (India CSR): As of June 2025, the combined investment of Indian states and Union Territories in reserve funds and government securities stood at a massive Rs. 4,50,651 crore. These investments include the Consolidated Sinking Fund (CSF), the Guarantee Redemption Fund (GRF), and Auction Treasury Bills (ATBs). Together, they provide a clear picture of how states are managing their fiscal discipline and planning for future liabilities.
According to the data released by the Reserve Bank of India (RBI), the total investment in CSF alone is Rs. 2,48,188 crore, which reflects nearly 55% of all contributions. Maharashtra, with Rs. 73,492 crore, accounted for almost 30% of the CSF corpus, making it the largest contributor. Karnataka, on the other hand, dominated the ATB category with a massive Rs. 70,564 crore, representing nearly 49% of all ATB holdings by states.
Meanwhile, Odisha, Uttar Pradesh, and West Bengal also showed significant contributions, balancing their CSF reserves with strong investments in ATBs. Smaller states and UTs, such as Himachal Pradesh, Kerala, and Puducherry, had negligible or no participation. The data highlights stark contrasts between developed and smaller states but also underscores a collective push towards strengthening fiscal buffers to meet future debt obligations.
Key Highlights
The RBI’s latest statistics reveal some important highlights. Maharashtra, Karnataka, and Odisha emerged as the top three performers, together accounting for more than half of the total investments across CSF, GRF, and ATBs. Maharashtra’s Rs. 73,492 crore in CSF made up 29.6% of the national CSF corpus, reaffirming its leading position in debt repayment preparedness.
Karnataka’s dominance came from its extraordinary Rs. 70,564 crore in ATBs, nearly 49% of all state-level investments in Treasury Bills, reflecting a preference for short-term liquidity managemet. Odisha displayed balanced prudence by holding Rs. 18,859 crore in CSF and Rs. 12,236 crore in ATBs, showing its strategy of combining long-term stability with short-term liquidity.
Uttar Pradesh was also a major investor, contributing 6% to CSF and 10.4% to ATBs, while West Bengal maintained 5.7% of CSF and 6.9% of ATBs. On the other end of the spectrum, smaller states like Manipur, Mizoram, and Tripura together contributed less than 1% across categories. Notably, Himachal Pradesh and Kerala reported no participation in CSF or GRF, reflecting fiscal stress. The aggregate Rs. 18,704 crore in GRF investments showed limited adoption, with only a few states such as Maharashtra, Odisha, and Telangana showing substantial commitments.
Growth Contribution by States (in %)
Table: State-Wise % Share in CSF, GRF and ATBs (as on June 2025)
| State/UT | CSF % | GRF % | ATBs % |
|---|---|---|---|
| Maharashtra | 29.60 | 11.84 | 0.00 |
| Karnataka | 8.39 | 4.13 | 49.08 |
| Odisha | 7.60 | 11.25 | 8.51 |
| Uttar Pradesh | 6.07 | 12.01 | 10.43 |
| West Bengal | 5.74 | 5.68 | 6.95 |
| Bihar | 5.15 | 0.00 | 8.00 |
| Andhra Pradesh | 4.77 | 6.75 | 0.00 |
| Gujarat | 6.36 | 3.67 | 1.74 |
| Chhattisgarh | 3.39 | 5.67 | 4.96 |
| Punjab | 4.18 | 5.07 | 0.00 |
| Telangana | 3.28 | 9.51 | 0.00 |
| Others (combined) | 15.26 | 24.92 | 10.33 |
| Total | 100 | 100 | 100 |
Interpretation of Trends
The growth contribution table provides a deeper insight into the fiscal strategies of states. Maharashtra, contributing nearly 30% to CSF, is the most disciplined in long-term debt repayment, while Karnataka, with 49% of all ATBs, stands out as the liquidity-driven state. Odisha’s dual investment, accounting for 7.6% in CSF and 8.5% in ATBs, reveals a hybrid approach where fiscal discipline is matched with liquidity management. Uttar Pradesh and West Bengal are also noteworthy, combining sizeable CSF contributions with strong ATB positions. Interestingly, states like Bihar and Gujarat are moderate contributors, showing stable fiscal strategies but not as aggressive as the larger economies.
The limited size of the GRF, at only Rs. 18,704 crore nationally, highlights a critical gap: most states are not fully utilizing this reserve fund, which is crucial for meeting guarantee obligations. While Telangana and Odisha made notable contributions, many states recorded zero GRF balances. Smaller northeastern states, such as Arunachal Pradesh and Nagaland, reported minimal shares, together forming less than 1% of the overall investment. This uneven distribution indicates that while large states are building robust cushions, many smaller states risk fiscal vulnerability in the absence of meaningful reserve fund contributions.
(India CSR)
