BUDGET

Madhya Pradesh Budget Analysis

2019-2020
The Finance Minister, Mr. Tarun Bhanot, presented the budget for Madhya Pradesh for financial year 2019-20
on July 10, 2019. The Minister had previously presented the interim budget for the state in February 2019.
Budget Highlights
The Gross State Domestic Product (GSDP) of Madhya Pradesh for 2019-20 (at current prices) is
estimated to be Rs 9,62,430 crore. This is 14.2% higher than the revised estimate for 2018-19.
Total expenditure for 2019-20 is estimated to be Rs 2,28,888 crore, a 20% increase over the revised
estimate of 2018-19. In 2018-19, as per the revised figures, there is estimated decrease of Rs 8,447
crore (4.2%) of expenditure over the budgeted estimate.
Total receipts (excluding borrowings) for 2019-20 are estimated to be Rs 1,81,979 crore, an increase
of 20% as compared to the revised estimate of 2018-19. Borrowings are estimated to be Rs 42,984
crore, an increase of 15.3% over the revised estimate of 2018-19.
Revenue surplus for 2019-20 is targeted at Rs 733 crore, or 0.08% of the Gross State Domestic
Product (GSDP). Fiscal deficit is targeted at Rs 32,106 crore (3.34% of GSDP).
Sectors such as Rural Development (36%), Health and Family Welfare (35%), and Energy (34%) saw the
highest increase in allocations.

Policy Highlights
River rejuvenation programme has been announced for holistic water management through rain
water harvesting and groundwater recharge. In the first phase of the programme, 40 rivers have
been selected from 36 districts.
Rs 1,000 crore has been allocated to protect water sources and quality through the proposed
Right to Water Act.
Mukhyamantri Bagwani Evam Khadya Sanskaran Yojana: Rs 100 crore has been allocated to promote
horticulture and food processing industries.
Under Indira Griha Jyoti Yojana, domestic electricity consumers will pay a monthly bill of Rs 100 for up
to 100 units of consumption. Rs 2,400 crore has been allocated for the same.
Madhya Pradesh’s Economy
 GSDP: The growth rate of Madhya Pradesh’s GSDP (at current prices) has decreased from 12.8% in 2015-16 to
12.2% in 2017-18.
 Sectors: In 2017-18, the sectors of agriculture, manufacturing, and services respectively contributed 45%, 20%,
and 35% of the Gross State Value Added by all sectors. Between 2016-17 and 2017-18, these sectors grew by
13.7%, 9.1%, and 11.1%, respectively.
 Unemployment: According to the Periodic Labour Force Survey (2017- 18), the unemployment rate in Madhya
Pradesh in 2017-18 was 4.5%, as compared to 6.1% in the country.

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 Budget Estimates for 2019-20
The total expenditure in 2019-20 is targeted at Rs 2,28,888 crore. This is 20% higher than the revised
estimate of 2018-19. This expenditure is proposed to be met through receipts (other than borrowings)
of Rs 1,81,979 crore and borrowings of Rs 42,984 crore. In 2019-20, receipts (other than borrowings) are
expected to be 20% higher than the revised estimate of 2018-19.

Table 1: Budget 2019-20 - Key figures (in Rs crore)

2017-18 2018-19 2018-19 % change from BE 2019-20 % change from RE
Item
Actuals Budgete Revised 2018- 19 to RE of Budgete 2018- 19 to BE
s
d 2018-19 d 2019-20
Total Expenditure 1,68,486 1,99,183 1,90,73 -4.2% 2,28,888 20.0%
6
A. Receipts
1,39,964 1,59,905 1,51,66 -5.2% 1,81,979 20.0%
(except
7
borrowings)
B. Borrowings 21,892 37,840 37,274 -1.5% 42,984 15.3%
Total Receipts (A+B) 1,61,856 1,97,745 1,88,94 -4.5% 2,24,963 19.1%
1
Revenue Deficit
4,629 263 137 -47.7% 733 433.6%
(-)/ Surplus (+)
As % of GSDP 0.65% 0.03% 0.02% 0.08%
Fiscal Deficit
-22,430 -26,780 -28,612 6.8% -32,106 12.2%
(-)/ Surplus
(+)
As % of GSDP -3.17% -3.24% -3.40% -3.34%
Primary Deficit
-11,385 -13,913 -16,370 17.7% -17,674 8.0%
(-)/ Surplus (+)
As % of GSDP -1.61% -1.68% -1.94% -1.84%
Notes: BE is Budget Estimate; RE is Revised Estimate.

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Expenditure in 2019-20
Capital expenditure for 2019-20 is proposed to be Rs 50,267 crore, which is an increase of 26.6% over
the revised estimate of 2018-19. Capital expenditure includes expenditure affecting the assets and
liabilities of the state, such as: (i) capital outlay, i.e. expenditure which leads to creation of assets (such
as bridges and hospitals), and (ii) repayment and grant of loans by the state government.
Madhya Pradesh’s capital outlay for 2019-20 is estimated to be Rs 33,490 crore, which is 22.9% higher
than the revised estimate of 2018-19. The revised figure for 2018-19 is estimated to be 7.2% lower than
the budgeted estimate made for that year. In 2019-20, capital outlay on education is estimated to
increase by Rs 746 crore (74%).
Revenue expenditure for 2019-20 is proposed to be Rs 1,78,621 crore, which is an increase of 18.3%
over the revised estimate of 2018-19. This expenditure includes payment of salaries, pensions, and
interest, among others. Revenue expenditure accounts for 78% of the total expenditure proposed for
2019-20.
Table 2: Expenditure budget 2019-20 (in Rs crore)
2017-18 2018-19 2018-19 % change from 2019-20 % change from
Ite
Actuals Budgeted Revised BE 2018-19 to RE Budgeted RE 2018-19 to BE
m
2018-19 2019-20
Capital Expenditure 38,240 43,559 39,713 -8.8% 50,267 26.6%
of which Capital 30,913 29,343 27,244 -7.2% 33,490 22.9%
Outlay
Revenue Expenditure 1,30,246 1,55,624 1,51,022 -3.0% 1,78,621 18.3%
Total Expenditure 1,68,486 1,99,183 1,90,736 -4.2% 2,28,888 20.0%
A. Debt Repayment 5,776 12,498 10,456 -16.3% 14,803 41.6%
B. Interest Payments 11,045 12,867 12,242 -4.9% 14,432 17.9%
Debt Servicing (A+B) 16,822 25,365 22,699 -10.5% 29,235 28.8%

Sector expenditure in 2019-20

The sectors listed below account for 67% of the total budgeted expenditure of Madhya Pradesh in 2019-20. A
comparison of Madhya Pradesh’s expenditure on key sectors with that by other states can be found in the
Annexure.
Table 3: Sector-wise expenditure for Madhya Pradesh Budget 2019-20 (Rs crore)
2017- 2018-19 2018- 2019-20 % change
Secto 18 Budgete 19 Budgete from RE Budget provisions for 2019-20
r Actuals d Revised d 2018-19 to
BE 2019-20
 Rs 24,499 crore has been
Education 24,342 28,817 28,591 32,046 12% allocated to various schemes
of school education
department.
 Rs 2,201 crore has been
Agriculture 12,324 16,912 22,222 24,174 9% allocated to Pradhan Mantri
and allied Fasal Bima Yojana.
activities  Rs 8,000 crore has been
allocated to Jai Kissan Fasal Rin
Mafi Yojana.
Water
Supply,  Rs 2,000 crore has been
Sanitation, 19,682 18,048 16,329 20,821 28% allocated to Atal Mission for
Housing and Rejuvenation and Urban
Urban Transformation.
Developm

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 ent

Energy 17,233 16,212 11,461 15,302 34%  Rs 2,116 crore has been allocated
to Indira Ghar Jyoti Yojana.
 Rs 2,500 crore and Rs 1,400 crore
Rural 9,007 11,851 11,040 14,972 36% has been allocated to Pradhan
Developm Mantri Gram Sadak Yojana and
ent Mukhya Mantri Gram Sadak Yojana
respectively.
 Rs 2,735 crore has been
Health and allocated to National Health
Family Welfare 7,449 8,385 7,785 10,499 35% Mission.
 Rs 517 crore has been allocated to
the Chief Minister’s Labour Service
Maternity Assistance.
Irrigation 8,618 9,573 9,584 9,712 1%  Rs 6,877 crore has been
and Flood allocated under capital head to
Control various irrigation projects.
Social Welfare  Rs 1,517 crore has been allocated
and Nutrition 6,776 8,362 7,738 9,690 25% to special nutrition plan for
minimum requirement program.
Transport 7,503 7,465 6,904 8,465 23%  Rs 1,017 crore has been allocated
to M.P. Road Development
Program.
 Rs 122 crore has been allocated
Police 5,559 6,483 6,705 7,177 7% to centralised police call centre
and control room system.
% of total 70% 66% 67% 67%
expenditu
re
Source: Madhya Pradesh Budget Speech 2019-20, July 2019; Madhya Pradesh Annual Financial Statement 2019-20, July 2019;
Madhya Pradesh Budget Press Release 2019-20, July 2019: PRS.

Committed liabilities: Committed liabilities of a state typically includes expenditure on payment of salaries,
pensions, and interest payments. A larger proportion of state budget allocated for committed expenditure
crowds out other developmental expenditure. In 2019-20, Madhya Pradesh has budgeted to spend Rs
63,265 crore on the payment of salaries, interest, and pensions. This is an increase of 14.3% over the
revised estimates of 2018-19. Note that committed liabilities account for 28% of the total expenditure
estimated for 2019-20.
Table 4: Expenditure on committed liabilities in 2019-20 (in Rs crore)
2017-18 2018-19 2018-19 % change from 2019-20 % change from
Ite Actuals Budgeted Revised Budgete RE 2018-19 to BE
BE 2018-19 to RE
m d
2018-19 2019-20
Salaries 25,664 31,920 30,420 -4.7% 35,216 15.8%
Pensions 9,290 12,557 12,669 0.9% 13,617 7.5%
Interest 11,045 12,867 12,242 -4.9% 14,432 17.9%
payments
Total
Committed 46,000 57,344 55,331 -3.5% 63,265 14.3%
Liabilities