The Ganga mostly flows east-southeast across the Indo-Gangetic alluvial plains towards its mouth in Kolkata. As it approaches Varanasi in eastern Uttar Pradesh (UP), it encounters something unusual: an outlier of ancient Vindhyan sandstone that juts northward into the otherwise soft alluvial plain.

The river cannot cut through this resistant rock as easily as through alluvium, so instead of continuing straight eastward, it deflects northward, running along the western flank of this Vindhyan rock ridge. It flows north for a short distance past the iconic ghats before eventually bending eastward again. This is what geomorphologists technically call lithological control over a river platform.

The northward flow is central to the city’s religious significance. A river flowing north towards the Himalayas has been interpreted as an ascent towards the divine. The ghats are built along the crescent-shaped concave western bank that the northward-flowing river naturally created, giving them their dramatic amphitheatre-like form.

This ancient city framed between the Varuna River to its north and Assi River to its south (hence Varanasi) is one of the world’s oldest continuously inhabited cities, with a history spanning some 5,000 years.

Varanasi, and its re-emergence in the last dozen or so years, is central to the direction of India’s modern politics. While much is still left to be done, it has been dramatically cleaned up.

It is the Prime Minister’s constituency in the country’s largest state, led by a future contender for high office at the national level. If Ayodhya is the emotional epicentre of the ruling Bharatiya Janata Party’s (BJP’s) political projection, then Varanasi can lay claim to being its philosophical centre. Both these cities are in UP.

Like Varanasi, the state of UP could economically perform much better, but a lot has been achieved. Unlike many large states in India, UP has been running a revenue surplus for two decades now.

A revenue surplus is achieved when a state’s revenue receipts are higher than its revenue expenditure. This usually means that a balance has been struck between the payment of salaries/pensions of government staff and investments in assets like roads, airports and irrigation systems.

UP has achieved a revenue surplus of approximately 1% of its gross state domestic product (GSDP) for over 20 years now under both non-BJP and BJP governments (except for one covid year). The annual revenue surplus since the BJP came to power in 2017 is about half a percentage point higher on average, but it is more volatile than before.

The state’s BJP government also appears to be budgeting revenue aggressively, resulting in a greater difference between budgeted expenditure and revised expenditure. Nevertheless, for several years now, UP has managed a revenue surplus and also a moderate budget deficit.

This is in remarkable contrast to other Indian states. Punjab, Kerala and Himachal Pradesh, for instance, run persistent revenue deficits of over 2%. Maharashtra, which is a similarly large state, has had a mirror image revenue deficit to UP’s surplus over the last decade.

UP does have some structural advantages. As India’s most populous state, it is the beneficiary of a sizeable chunk of the destination-oriented goods and services tax (GST). Its population combined with the fact that the governing party is the same both in the state and at the Centre (‘double engine sarkar’) results in the single largest share of central tax devolution.

Beyond these, the government of the day in UP has followed a fiscally prudent strategy of controlling expenditure and increasing revenue mobilization.

In its spending pattern, UP stands out among big states because it is the only state to refrain from unconditional cash transfers, especially to women. UP does not have a scheme equivalent to the Ladki Behen scheme in Maharashtra or the Ladli Behna scheme of Madhya Pradesh.

One reason for this could be that the scale of this for UP would make it unviable. With an estimated 50 million eligible women, even a modest ₹1,500 cash transfer a month will cost the exchequer ₹90,000 crore a year and serve to double the fiscal deficit. The comparable number for Maharashtra is about ₹20,000 crore, and for Karnataka’s Gruhalakshmi scheme, about ₹29,000 crore a year.

According to PRS Legislative Research, 12 Indian states collectively spent about ₹1.7 trillion on unconditional cash transfer schemes to women in 2025-26. This is up from two states just three years ago, so it is definitely a fast-evolving trend among states.

Whether UP will be able to resist this trend going into next year’s assembly elections will determine if it can maintain its impressive record of fiscal management. If UP does manage to buck the trend, it will demonstrate an alternate model to the harmful and ultimately financially unviable economic populism among states.

Of course, as a relatively poor state, UP cannot be indifferent to welfare spending for women. Like it has already done, it should focus this spending on conditional cash transfer schemes tied to education, health, institutional maternity and skilling milestones. These programmes are tied to behavioural change and work to compound positive outcomes over time.

P.S: “Do not spend a single paisa on useless things, spend lakhs on good deeds,” said Madan Mohan Malaviya, founder of Banaras Hindu University.

The author is chairman, InKlude Labs. Read Narayan’s Mint columns at www.livemint.com/avisiblehand

The Ganga mostly flows east-southeast across the Indo-Gangetic alluvial plains towards its mouth in Kolkata. As it approaches Varanasi in eastern Uttar Pradesh (UP), it encounters something unusual: an outlier of ancient Vindhyan sandstone that juts northward into the otherwise soft alluvial plain.

The river cannot cut through this resistant rock as easily as through alluvium, so instead of continuing straight eastward, it deflects northward, running along the western flank of this Vindhyan rock ridge. It flows north for a short distance past the iconic ghats before eventually bending eastward again. This is what geomorphologists technically call lithological control over a river platform.

The northward flow is central to the city’s religious significance. A river flowing north towards the Himalayas has been interpreted as an ascent towards the divine. The ghats are built along the crescent-shaped concave western bank that the northward-flowing river naturally created, giving them their dramatic amphitheatre-like form.

This ancient city framed between the Varuna River to its north and Assi River to its south (hence Varanasi) is one of the world’s oldest continuously inhabited cities, with a history spanning some 5,000 years.

Varanasi, and its re-emergence in the last dozen or so years, is central to the direction of India’s modern politics. While much is still left to be done, it has been dramatically cleaned up.

It is the Prime Minister’s constituency in the country’s largest state, led by a future contender for high office at the national level. If Ayodhya is the emotional epicentre of the ruling Bharatiya Janata Party’s (BJP’s) political projection, then Varanasi can lay claim to being its philosophical centre. Both these cities are in UP.

Like Varanasi, the state of UP could economically perform much better, but a lot has been achieved. Unlike many large states in India, UP has been running a revenue surplus for two decades now.

A revenue surplus is achieved when a state’s revenue receipts are higher than its revenue expenditure. This usually means that a balance has been struck between the payment of salaries/pensions of government staff and investments in assets like roads, airports and irrigation systems.

UP has achieved a revenue surplus of approximately 1% of its gross state domestic product (GSDP) for over 20 years now under both non-BJP and BJP governments (except for one covid year). The annual revenue surplus since the BJP came to power in 2017 is about half a percentage point higher on average, but it is more volatile than before.

The state’s BJP government also appears to be budgeting revenue aggressively, resulting in a greater difference between budgeted expenditure and revised expenditure. Nevertheless, for several years now, UP has managed a revenue surplus and also a moderate budget deficit.

This is in remarkable contrast to other Indian states. Punjab, Kerala and Himachal Pradesh, for instance, run persistent revenue deficits of over 2%. Maharashtra, which is a similarly large state, has had a mirror image revenue deficit to UP’s surplus over the last decade.

UP does have some structural advantages. As India’s most populous state, it is the beneficiary of a sizeable chunk of the destination-oriented goods and services tax (GST). Its population combined with the fact that the governing party is the same both in the state and at the Centre (‘double engine sarkar’) results in the single largest share of central tax devolution.

Beyond these, the government of the day in UP has followed a fiscally prudent strategy of controlling expenditure and increasing revenue mobilization.

In its spending pattern, UP stands out among big states because it is the only state to refrain from unconditional cash transfers, especially to women. UP does not have a scheme equivalent to the Ladki Behen scheme in Maharashtra or the Ladli Behna scheme of Madhya Pradesh.

One reason for this could be that the scale of this for UP would make it unviable. With an estimated 50 million eligible women, even a modest ₹1,500 cash transfer a month will cost the exchequer ₹90,000 crore a year and serve to double the fiscal deficit. The comparable number for Maharashtra is about ₹20,000 crore, and for Karnataka’s Gruhalakshmi scheme, about ₹29,000 crore a year.

According to PRS Legislative Research, 12 Indian states collectively spent about ₹1.7 trillion on unconditional cash transfer schemes to women in 2025-26. This is up from two states just three years ago, so it is definitely a fast-evolving trend among states.

Whether UP will be able to resist this trend going into next year’s assembly elections will determine if it can maintain its impressive record of fiscal management. If UP does manage to buck the trend, it will demonstrate an alternate model to the harmful and ultimately financially unviable economic populism among states.

Of course, as a relatively poor state, UP cannot be indifferent to welfare spending for women. Like it has already done, it should focus this spending on conditional cash transfer schemes tied to education, health, institutional maternity and skilling milestones. These programmes are tied to behavioural change and work to compound positive outcomes over time.

P.S: “Do not spend a single paisa on useless things, spend lakhs on good deeds,” said Madan Mohan Malaviya, founder of Banaras Hindu University.

The author is chairman, InKlude Labs. Read Narayan’s Mint columns at www.livemint.com/avisiblehand