The present paper endeavours to assess the fiscal performance of a major States, Uttar Pradesh and a minor state, Uttarakhand separated by Uttar Pradesh in November 2000. The paper highlights that while Uttar Pradesh’s large economy and revenue generation capacity give it an advantage, its high debt burden, reduced social sector spending, and growing central dependence pose fiscal risks. Uttarakhand, despite its smaller size and limited industrial base, exhibits better fiscal discipline, prioritizes human development sectors like education and health, and shows positive signs of debt management. However, its over-reliance on central grants limits its financial independence. The study suggests that both states need to balance infrastructure spending with sustainable social sector investment to ensure long-term fiscal health and economic stability.