Madhya Pradesh:Economy current affairs
GSDP
The Gross State Domestic Product of Madhya Pradesh at current prices for 2017-18 is estimated to be Rs. 7,35,246 crore. This is 13.9% higher than the revised estimate for 2016-17.
Between 2011-12 and 2015-16, the state’s GSDP grew at an average annual rate of 7.5% (at constant prices). Over this period, per capita income increased from Rs 43,082 to Rs 54,190, an average increase of 5.9%.
In 2015-16, the state’s GDP grew at 8.7%, at constant prices. The agriculture sector grew at 7.2% (at constant prices) as compared to 2014- 15, while the manufacturing sector grew at 7%. The services sector grew at 8.9%, compared to 8.7% in 2014-15. The agriculture sector contributed to 34% of GSDP in 2015-16, while the manufacturing and services sectors contributed to 22% and 38% of the GSDP respectively.
Total expenditure
For 2017-18 is estimated to be Rs 1,69,954 crore, an 8.5% increase over the revised estimate of 2016-17. The revised estimate for 2016-17 is Rs 2,083 crore lower than the budgeted target.
Total receipts (excluding borrowings)
for 2017-18 are estimated to be 11.4% higher, at Rs 1,45,111 crore. In 2016-17, they fell short of the budgeted target by Rs 4,111 crore.
Revenue surplus for the next financial year is targeted at Rs 4,596 crore, or 0.63% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 25,689 crore (3.49% of GSDP). The Fiscal Responsibility and Budget Management Act, 2005 mandates a fiscal deficit ceiling of 3.5% of GSDP. Primary deficit is targeted at Rs 14,148 crore (1.9% of GSDP).
Rs 33,564 crore has been allocated for the Agriculture Budget in 2017-18. Rs 400 crore has been allocated to the Rashtriya Krishi Vikas Yojana, and Rs 305 crore has been allocated to the National Food Security Mission.
Allocations to the departments of Urban Administration and Development, School Education and Rural Development increased by 22%, 10% and 7% respectively, over the revised estimates of 2016-17. However, allocation to the Department of Energy has decreased by 21%.
Irrigation
Rs 9,850 crore is proposed to be spent as capital expenses for irrigation schemes. In addition, Rs 140 crore has been allocated for micro-irrigation.
Education
36,000 new teachers are proposed to be recruited; 520 high schools and 240 higher secondary schools are proposed to be upgraded.
Energy
Rs 4,622 crore is proposed to be spent on the UDAY scheme in 2017-18. In 2016-17, Rs 7,568 crore was provided as assistance to power distribution companies under UDAY scheme.
Workforce Participation
Workforce Participation Rate is the proportion of workers or job seekers to its population. The Rate for Madhya Pradesh (2015-16) was 44.8%, lower than 59.2% in 2013-14. Note that in 2015-16, the national average stood at 50.5%.
Budget Estimates for 2017-18
The total expenditure in 2017-18 is targeted at Rs 1,69,954 crore. The expenditure in 2016-17 was Rs 1,56,630 crore, which is 1% (or Rs 2,083 crore) less than the budgeted target.
The expenditure in 2017-18 is proposed to be met through receipts (other than borrowings) of Rs 1,45,111 crore and borrowings of Rs 24,392 crore. Total receipts for 2017-18 (other than borrowings) are expected to be 11% more than the revised estimate of 2016-17.
Skill Development
Rs 100 crore has been allocated under skill development scheme, for the ‘Mukhyamantri Kaushal Samwardhan and Kaushalya Scheme’, to train 2.5 lakh youngsters and two lakh women.
Scheduled Castes and Scheduled Tribes development
Rs 25,862 crore has been allocated to the Scheduled Tribe subscheme in 2017-18, and Rs 16,381 crore has been allocated to the Scheduled Castes sub-scheme.
Tax Revenue
Among all sources of Tax revenue, sales tax is the largest component. Sales tax is levied on the sale of goods in the state is expected to generate Rs 25,910 crore (52% of tax revenue).
The state is expected to generate Rs 8,600 crore (17%) through levy of state excise duty on the production of various forms of alcohol.
In addition, revenue will be generated through stamp duties, registration charges on real estate transactions, electricity duties, among others.
Non Tax Revenue
Madhya Pradesh has budgeted to generate Rs 11,680 crore through non-tax sources.
In 2016-17, the state expected to generate a revenue of Rs 4,143 crore from education (such as licensing fees); however, the revised estimate is Rs 1,038 crore lower than the budgeted estimate. In 2017-18, Rs 3,310 crore is estimated to be generated from education.
Revenue deficit
It is the excess of revenue expenditure over revenue receipts. A revenue deficit implies that the recurring receipts of the government are unable to cover its recurring expenditures. The revenue surplus is expected at Rs 4,596 crore (or 0.63% of state GDP) in 2017-18. This is better than the target of eliminating revenue deficit prescribed by the state’s FRBM Act and by the 14th Finance Commission.
Fiscal deficit
It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government, and leads to an increase in total liabilities of the government. In 2016-17, fiscal deficit increased from the budgeted target of Rs 24,914 crore to Rs 29,899 crore (4.63% of GSDP). This increase includes Rs 7,361 crore taken up as market borrowings on account of the UDAY scheme. The revised estimate in 2016-17 exceeded the 3.0% limit under the 14th Finance Commission, and the 3.5% limit under the FRBM Act. In 2017-18, fiscal deficit is estimated at Rs 25,689 crore (3.49% of GSDP).
Outstanding Liabilities
It is the accumulation of borrowings over the years. In 2017-18, the outstanding liabilities are expected at 24.9% of GSDP, an increase over the 24.6% as per revised estimates of 2016-17. They are estimated to further increase to 25.8% in 2018-19, 26.3% in 2019-20, and 26.5% in 2020-21. An increase in liabilities over time indicates that the state would be required to pay more in terms of interest payments as well as principle amount repayments over the coming years.
Road Network
Connectivity is the sine qua non of development. It is the basic strength for synthesized growth of any state. Madhya Pradesh takes pride in being the heartland of India on account of its central position, national trunk routes, North-South and the East-West corridors, pass through the state. But it is ironical that despite its central location Madhya Pradesh, which should have become one of the most well connected states of the country, has been bypassed in terms of National Highways and other future projects undertaken. Figures show that out of 200 Highways only 18 criss- cross Madhya Pradesh. Out of 13252 km of proposed Golden Quadrilateral (GQ), North- South (N-S), and East-West (E-W) corridors, only 621 km (4.68%) would pass through the state. Faced with this situation, the Government of Madhya Pradesh has undertaken several strategic measures for achieving objective of providing quality road connectivity. A special purpose vehicle company, M.P. Road Development Corporation Ltd. (MPRDCL) was incorporated on 14th July, 2004. The state promulgated the Highway Acton 02.07.2005 and has notified MPRDCL as a State Highway Authority. MPRDC has been assigned the role of developing projects on BOT (Build-Operate-Transfer), with the assistance of ADB and through State Budget funds. It is primarily focusing on maximizing private sector participation in the development of roads. Construction, up-gradation and maintenance of roads is a gigantic challenge. To meet this challenge, the state has adopted an innovative strategy of private participation. More and more roads are being developed on a Build- Operate-Transfer basis.
Electricity in Madhya Pradesh
Power is a driving force of modern development. Almost all forms of economic activities – agricultural, industrial or services are dependent on uninterrupted power supply. In view of the increasing demand of power, the state is determined to gallop a head to become self-sufficient for supplying reliable and quality power to all categories of consumers viz., industrial, agricultural, commercial and domestic at reasonable rates. The state is presently facing peak energy shortages. The challenge before the state is to bridge this gap and make the state self sufficient in Power.
During the FY 11, energy input in the state was increased by 9%. It further increased by 11% in FY 12. However, it has been planned to increase input further by 20% during FY 13 and by 23% in FY 14. This increase has been planned considering the impact of feeder separation scheme. During FY 13 & FY 14, capacity addition plan for the state is 1719 MW and 3133 MW, respectively.
Presently, Madhya Pradesh Power Generating Company has 3724.7 MWof power generating capacity comprising 2807.50 MW of thermal and 917.20 MW of hydel power. The state is also having capacity of 2372 MW from Narmada Valley Projects. The state has also got share in central power generating stations to supplement its own power generation capacity.It serves over 96 Lakh consumers including about 13.97 Lakh agricultural consumers.
L&T Construction bags Rs 1,394 crore irrigation project in MP
Larsen & Toubro’s construction division has bagged an irrigationNSE -1.96 % project order worth Rs 1,394 crore from Madhya Pradesh .
L&T will execute the state’s Kundalia irrigation project on engineering, procurement and construction basis. The project aims to provide water for micro-irrigation to more than 64,000 Ha. of cultivable land in the Rajgarh district of Madhya Pradesh by lifting water from right bank of the Kundalia reservoir on the Kalisindh river.
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