Main features of Budget of Bihar
Budget Highlights
The Gross State Domestic Product of Bihar for 2017-18 at current prices is estimated to be Rs 6,32,180 crore. This is 17% higher than the revised estimates for 2016-17.
Total expenditure for 2017-18 is estimated to be Rs 1,60,086 crore, 3.7% higher than the revised estimates of 2016-17. In 2016-17, there was an increase of Rs 9,631 crore (6.7%) in the government’s expenditure during the year, over the budget estimate.
Education received the highest allocation of Rs 25,251 crore in 2017-18, which is 11% higher than the revised estimates of 2016-17. Other departments that have witnessed an increase in allocation include Rural Works (24%) and Panchayat Raj (21%). On the other hand, the Department of Energy (-30%) and Health (-16%) have witnessed a decrease in allocation.
Total receipts (excluding borrowings) for 2017-18 are estimated to be Rs 1,37,176 crore, an increase of 9.5% over the revised estimates of 2016-17. In 2016-17, total receipts exceeded the budgeted target by Rs 1,163 crore. This is primarily on account of an increase in grants received from the centre to implement the National Food Security Act, and the Mahatma Gandhi National Rural Employment Guarantee Act, among others.
Bihar’s tax revenue is expected to be Rs 32,001 crore in 2017-18. This is an increase of 14.7% (Rs 4,104 crore) over the revised estimates of 2016-17. Sales Tax collection (76% of the total own tax revenue) is expected to be Rs 24,400 crore. This is 74% higher than the revised estimates of 2016-17.
No tax proposals have been made in the budget. Note that the Goods and Services Tax (GST) is expected to be rolled out in 2017-18. It will subsume some taxes such as Sales Tax and Entertainment Tax (unless it is levied by local bodies).
Revenue surplus for the next financial year is targeted at Rs 14,556 crore, or 2.3% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 18,112 crore (2.9% of GSDP). Note that during 2016-17, fiscal deficit is estimated to be Rs 22,512 crore, which is 4.2% of GSDP. This is higher than the 3% limit recommended by the 14th Finance Commission.
Expenditure in 2017-18
Government expenditure can be divided into
- capital expenditure, which affects the assets and liabilities of the state, and
- revenue expenditure, which includes the rest of the expenses.
Total capital expenditure of Bihar is proposed to be Rs 37,483 crore, which is an increase of 2.8% over the revised estimates of 2016-17. This includes expenditure which leads to creation of assets, and repayment of loans, among others. The Department of Rural Works had the highest allocation for capital expenditure at Rs 8,332 crore, followed by Energy with Rs 5,810 crore.
Total revenue expenditure for 2017-18 is proposed to be Rs 1,22,603 crore, which is an increase of 3.7% over revised estimates of 2016-17. This expenditure includes payment of salaries, administration of government programs, etc.
Main Features of the Budget :
The key departments of education, rural development, rural works, energy, health and road construction got a major thrust in the state’s budget. Chief Minister Nitish Kumar’s ‘Saat Nischay’ (seven resolves) which has found its place in the budget document. Most of the schemes in it were launched by the government in 2016 itself. As far as seven resolves are concerned, adequate allocation has been made to the respective departments to which the seven schemes are linked.
These seven commitments are —
(i) Arthik Hal, Yuvaon Ka Bal (Economic solution is the strength of the youth),
(ii) Aarakshit Rozgar Mahilaon Ka Adhikar (Assured employment is the right of the women),
(iii) Har Ghar Bijli Lagatar (Constant supply of electricity for each household),
(iv) Har Ghar Nal Ka Jal (Running tap water for evey household),
(v) Ghar tak Pakki Gali-Naliyan (Paved road and drains for every house),
(vi) Shauchalay Nirman Ghar Ka Samman (Construction of toilets makes decent houses) and
(vii) Awsar Badhe, Aage Padhe (Better facilities for higher education).
The Budget proposes to open three new universities in the financial year 2017-18. The three universities will be named as Purnea university , Pataliputra university and Munger university.
Education
Rs 6,394 crore has been allocated for the Sarva Shiksha Abhiyaan, 5% lower than the revised estimates of 2016-17.
Rs 3,478 crore has been allocated for Rajkiya Prathamik Vidyalaya, and Rs 2,039 crore for Rajkiya Madhyamik Vidyalaya.
Rs 2,436 crore has been allocated for the Mid-Day Meal Scheme, a two-fold increase over the revised estimates of 2016-17.
The Budget proposes to open three new universities in the financial year 2017-18. The three universities will be named as Purnea university , Pataliputra university and Munger university.
Rural Development
Rs 5,927 crore has been allocated for housing, which is 12% higher than 2016-17. This includes allocations for Indira Awas Yojana (now known as Pradhan Mantri Awas Yojana (Grameen).
Energy
46% of the Department’s allocation (Rs 5,095 crore) is estimated to be on revenue expenditure, which includes subsidy on electricity.
Rs 5,810 crore has been allocated for investment in state power corporations, and loans for power projects. This is 30% less than 2016-17.
Panchayati Raj
Rs 4,097 crore has been allocated for assistance to Panchayati Raj Institutions, 15% more than 2016-17.
Health
Rs 2,225 crore has been allocated for urban health services-allopathic. This is 18% lower than 2016-17. Rs 2,389 crore has been allocated for rural health services. This is 23% lower than 2016-17.
Allocations for urban and rural areas include funds for schemes such as National Rural Health Mission. These funds are used for maintenance of hospitals and salaries for doctors.
Rs 819 crore has been allocated for capital expenses, such as construction of hospitals. This is 10% less than 2016-17.
Pension
The expenditure on pensions is expected to increase by Rs 3,592 crore. This may be on account of the proposed implementation of the Seventh Central Pay Commission recommendations.
Road Construction
The expenditure on pensions is expected to increase by Rs 3,592 crore. This may be on account of the proposed implementation of the Seventh Central Pay Commission recommendations.
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