A central empirical contribution of the Economic Survey 2025-26 is its explicit shift from assessing Union government fiscal performance in isolation to evaluating general government finances as the relevant unit of market scrutiny. If fully realised, this would push total state market borrowing for the year to an all-time high, with the fourth quarter alone accounting for close to two-fifths of the annual total. What gives this clustering sharper significance is a point stressed in the Economic Survey 2025-26: state borrowing is no longer being absorbed passively by markets. This surge in state borrowing comes at a time when the Union government is expected to emphasise fiscal restraint and consolidation in the Budget. The RBI’s Financial Stability Report (December 2025) helps explain why state borrowing has risen so sharply.