The paper assesses the sustainability of debt for Indian states. Fiscal shocks through schemes like Ujwal DISCOM Assurance Yojana (UDAY) have led to increased fiscal pressures exacerbating the debt dynamics of states at periodic intervals. Recognising the increasing precedence of such fiscal shocks and invoking of contingent liabilities, the paper uses both conventional liabilities/debt and the augmented debt arrived at by incorporating information on states’ guarantees and their likely fall out on states’ budgets. The sustainability is assessed using a standard indicator based approach and panel data framework for the post Fiscal Responsibility Legislations (FRLs) period. Results indicate that states debt is just about sustainable with some signs of unsustainability likely to emerge.