Main Features of Budget of Madhya Pradesh
Budget Highlights
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.
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%.
Budget estimates
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.
Budget expenditure
Government expenditures can be divided into
revenue expenditure, such as payment of salaries, and
capital outlay, which affects the assets and liabilities of the state.
Total revenue expenditure for 2017-18 is proposed to be Rs 1,34,519 crore, which is an increase of 8% over revised estimates of 2016-17. Total capital outlay is proposed to increase by 10.3% to Rs 35,435 crore from the revised estimates of 2016-17. This includes creation of assets, repayment of loans, etc.
Budget allocated to different sectors
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.
Horticulture : Rs 92 core was allocated for Rashtriya Krishi Vikas Yojana.
Rs 62 crore was allocated for National Horticulture Mission.
Rs 50 crore was allocated for Crop Insurance Scheme.
Rs 50 crore was allocated to increase storage capacity for onions.
Education: 36,000 new teachers are proposed to be recruited; 520 high schools and 240 higher secondary schools are proposed to be upgraded.
A provision of Rs 214 crore has been allocated for the construction of school buildings. Rs 92 crore has been allocated for the purchase of NCERT books.
A provision of Rs 48 crore has been made for the establishment, management and security of girls’ hostels.
Rs 703 crore for ST students, Rs 740 crore for SC students and Rs 850 crore for OBC students as scholarships/stipends.
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.
This allocation includes Rs 4,622 crore under the UDAY scheme. A scheme of Rs 4,200 crore is proposed to convert temporary connections into permanent connections.
Rural Development : Rs 2,000 crore has been made to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Rs 2,850 crore has been allocated to the Pradhan Mantri Gram Sadak Yojana (PMGSY).
Rs 1,127 crore has been allocated for the provision of basic amenities to Panchayats.
Urban Development and Environment : A provision of Rs 600 crore has been made for the Swatchh Bharat Abhiyan.
Rs 700 crore has been allocated for AMRUT Yojana, and Rs 700 crore has been allocated for the Smart Cities Mission. Sagar and Satna city are proposed to be included in phase two.
Police force: Rs 5,850 crore has been allocated to the police force. Rs 402 crore has been allocated for construction works for police personnel, and Rs 98 crore has been allocated to purchase new arms and vehicles for the police force.
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: 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.
Receipts in 2017-18
The total revenue receipts for 2017-18 are estimated to be Rs 1,39,116 crore. The tax to GSDP ratio is targeted at 6.8% in 2017-18, same as 6.8% in the revised estimates of 2016-17.
Tax revenue is expected to increase by 14% (or Rs 6,160 crore) in 2017-18 over the revised estimates of 2016-17. Non-tax revenue is estimated to increase by 12.2% (or Rs 1,270 crore) in 2017-18.
Grants from the centre are set to increase by Rs 593 crore, to Rs 26,034 crore in 2017-18. The other component of transfers from the centre, which is the state’s share in central taxes, is estimated to increase by Rs 5,042 crore, to Rs 51,106 crore in 2017-18.
Deficits , Debts and FRBM Targets for 2017-18
The Madhya Pradesh Fiscal Responsibility and Budget Management (FRBM) Act, 2005 provides annual targets to progressively reduce the outstanding debt, revenue deficit and fiscal deficit of the state government.
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.