Five years ago many of the state governments, such as Andhra and Kerala were nearly bankrupt and could not pay the bills. This is not the case anymore. Objective is to find out financial positions of the state governments from 1997 to 2007, i.e.revenues, expenditure and level of deficits. If the deficits went up during that period, what were the factors that determined it. If the deficits have come down in the last few years relative to the size of their state GDP or state revenues, we would like to know why and how. Where did the addl money come from.