This comprehensive study analyzes explicit subsidies across seven Indian states - Andhra Pradesh, Punjab, Rajasthan, Odisha, Uttar Pradesh, West Bengal, and Nagaland - examining their impact on state finances. The research reveals that states spending over 20% of revenue receipts on explicit subsidies face significant revenue deficits, while those maintaining subsidies below 15% show revenue surpluses. Notably, states like Punjab and Andhra Pradesh demonstrate high subsidy expenditure, primarily on power, agriculture, and welfare schemes, while Odisha and Uttar Pradesh maintain more sustainable levels. The study proposes using the TTTE Formula (Targeting, Transparency, Timeline, and Evaluation) for subsidy rationalization and emphasizes linking subsidy volumes to available fiscal space. Our findings suggest that uncontrolled subsidy growth, especially in revenue-deficit states, threatens fiscal sustainability and reduces capital expenditure, offering valuable insights for policymakers on subsidy rationalization while maintaining essential welfare objectives.