Madhya pradesh economic updates
Gross State Domestic Product
The Gross State Domestic Product of Madhya Pradesh for 2018-19 (at current prices) is estimated to be Rs 8,26,106 This is 19.7% higher than the revised estimate for 2017-18. Note that the GSDP in 2017-18 is expected to be 6% lower than what was estimated at the budget stage.
Economic growth rate trends
The Gross State Domestic Product (GSDP) of Madhya Pradesh increased from 5.4% in 2014-15 to 12.2% in 2016-17.
Growth in agriculture increased from 3.7% in 2014-15 to 20.4% in 2016-17. Services sector witnessed a decline from 12.5% in 2015-16 to 8.8% in 2016-17. During the same period, manufacturing saw an increase of 0.6%.
Total expenditure for 2018-19 is estimated to be Rs 1,86,685 crore, a 13.6% increase over the revised estimate of 2017-18. In 2017-18, the revised estimates indicate that the expenditure is expected to be Rs 5,660 crore lower than the budget estimate.
Total receipts (excluding borrowings) for 2018-19 are estimated to be Rs 1,61,356 crore, an increase of 13.9% as compared to the revised estimates of 2017-18. In 2017-18, total receipts (excluding borrowings) fell short of the budgeted estimate by Rs 3,486 crore (2.4%).
Revenue surplus for the next financial year is targeted at Rs 263 crore, or 0.03% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 26,780 crore (3.2% of GSDP).
Mukhyamantri Bhavantar Bhugtan Yojana
To ensure that farmers get the beneficial value for their crops, the government had launched the Mukhyamantri Bhavantar Bhugtan Yojana. Under the scheme, the difference between the support price and the market price is directly deposited in the bank accounts of the farmers. As per the budget, Rs 1,500 crore has been deposited to 10.5 lakh farmers’ accounts. The budget allocates an amount of Rs 37,498 to the agriculture sector.
Under the National Health Mission, the government has allocated Rs 1,975 crore for 2018-19. The government had launched the Swasthya Kshetra Nivesh Protsahan Yojana to promote investment for establishing hospitals and dispensaries. The budget has proposed setting up of 10 bed hospitals in small and rural areas with a 40% investment from the government and remaining from private parties.
Per Capita GSDP
Per capita GSDP in 2016-17 was Rs 59,052 crore. It increased from 3.9% in 2014-15 to 10.6% in 2016-17.
Capital expenditure for 2018-19 is proposed to be Rs 31,061 crore, which is an increase of 4.2% over the revised estimates of 2017-18. This includes expenditure which affects the assets and liabilities of the state, and leads to creation of assets (such as bridges and hospitals), and repayment of loans, among others. In 2017-18, the capital expenditure of Madhya Pradesh was 16% lower than its budget estimates.
Revenue expenditure for 2018-19 is proposed to be Rs 1,55,624 crore, which is an increase of 15.7% over revised estimates of 2017-18. This expenditure includes payment of salaries and pensions, and maintenance of existing infrastructure. In 2017-18, the revenue expenditure of Madhya Pradesh was similar to its budget estimate.
Total revenue receipts
The total revenue receipts for 2018-19 are estimated to be Rs 1,86,699 crore, an increase of 13.7% over the revised estimates of 2017-18. Of this, Rs 65,589 crore (42% of the revenue receipts) will be raised by the state through its own resources, and Rs 90,297 crore (58% of the revenue receipts) will be devolved by the centre in the form of grants and the state’s share in taxes.
Madhya Pradesh has estimated to generate Rs 10,934 crore through non-tax sources in 2018-19. This is a decrease of 15% over the revised estimates of 2017-18.
Total own tax revenue of Madhya Pradesh is estimated to be Rs 54,655 crore in 2018-19. The composition of the state’s tax revenue is shown in Figure 2. The tax to GSDP ratio is targeted at 6.62% in 2018-19, which is 0.1% less than the revised estimate of 6.72% in 2017-18.
It is the excess of revenue receipts over revenue expenditure. A revenue surplus implies that the government is not required to borrow in order to finance its expenses which do not create capital assets. The budget estimates a revenue surplus of Rs 263 crore (0.03% of GSDP) in 2018-19. This implies that revenue receipts are expected to be higher than the revenue expenditure, resulting in a surplus. The 14th Finance Commission had recommended that states should eliminate revenue deficits. The estimates in the Madhya Pradesh Budget 2018-19 suggest that the state is expected to achieve this target of eliminating revenue 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. In 2018-19, fiscal deficit is estimated to be Rs 26,780 crore, which is 3.2% of the GSDP. This estimate is higher than the 3% limit prescribed by the 14th Finance Commission. This limit may be relaxed to a maximum of 3.5%, if states are able to contain their debt and interest payments to certain specified levels.
Madhya Pradesh has allocated 12.9% on education in 2018-19. This is lower than the average expenditure allocated to education by 18 other states (using 2017-18 BE).
Madhya Pradesh has allocated 2.8% of its total expenditure on health, which is lower than the average expenditure of 18 other states.
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