Andhra Pradesh has the highest household debt, followed by Telangana and Kerala. Southern states show higher borrowing due to greater income and asset levels.
Published: October 26, 2025 12:31 PM IST
Indians Here Carry Most Debt: The debt-to-GDP ratio of several Indian states is concerning, with Andhra Pradesh having the highest debt levels in the country. The state is at the forefront in terms of debt in India. As per a report by the Central Statistics Office, citizens of Andhra Pradesh are in the highest debt followed by Telangana, which is in the second position. The data shows that the people in the southern part of India are comparatively more indebted than people living in the northern or central part of the country. As per experts, this shows the region’s higher prosperity, as people here can afford to take more loans and repay them easily.
Why South Indian States Ahead Of North Indian States In Terms Of Borrowing?
According to the report, a total of 43.7 percent of citizens of Andhra Pradesh are in debt, followed by Telangana, where 37.2 percent people are in debt. Kerala is in third position with 29.9 percent, Tamil Nadu 29.4 percent, and fifth position is secured by Karnatak,a where 23 percent people are in debt.
If we compare this to the north Indian states, 3.2 percent of people living in Delhi aer in debt. In Chandigarh, only 6.5 percent people are debt. The data shows that Delhiites are the most prosperous in North India, as they have the least debt.
What Are The Reasons For The Increase In Debt?
The rising debt is due to economic challenges. To address these challenges, states have had to borrow more. The top 10 debt-ridden states for 2024 are as follows: Tamil Nadu had the highest debt (₹8.3 lakh crore). Uttar Pradesh, led by Yogi Adityanath, came in second with a debt of ₹7.7 lakh crore. Maharashtra was third with ₹7.2 lakh crore. Further down the list were West Bengal (₹6.6 lakh crore), Karnataka (₹6.0 lakh crore), Rajasthan (₹5.6 lakh crore), Andhra Pradesh (₹4.9 lakh crore), Gujarat (₹4.7 lakh crore), Kerala (₹4.3 lakh crore), and Madhya Pradesh (₹4.2 lakh crore).
The increasing debt is a result of economic difficulties. In order to tackle these issues states have to increase their borrowing.
However, according to Paras Jasrai, associate director at India Ratings & Research, citizens of southern states have higher per capita incomes and more assets as compared to people living in northern states. This leads to more people in debt and higher household borrowing in these states.
“People there have high disposable incomes. Their credit-to-deposit ratio is also higher than the rest of the country. Hence, creditors are confident that loans will be serviced and have no hesitation in lending. However, the purpose for which these loans are taken could provide further insights into why indebtedness among southern households is relatively high,” he said.
Notably, a prosperous state must control its expenditures and increase its revenue.
If we talk about the national debt, the debt of Indian states has increased by approx 75% in last six years. Delhi’s ranking in 2025 is excellent.
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