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Bihar Budget Analysis 2024-25
The Finance Minister of Bihar, Mr Samrat Chaudhary, presented the Budget for the state for the financial year 2024-25 on February 13,
2024.
Budget Highlights
The Gross State Domestic Product (GSDP) of Bihar for 2024-25 (at current prices) is projected to be Rs 9.76 lakh crore,
amounting to growth of 13.5% over the previous year.
Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 2,56,333 crore, a decrease of 12% over the revised
estimates of 2023-24. In addition, debt of Rs 22,393 crore will be repaid by the state. In 2023-24, expenditure (excluding debt
repayment) is estimated to be 22% higher than the budget estimate.
Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 2,27,238 crore, an increase of 5.7% over the revised
estimates of 2023-24. In 2023-24, receipts (excluding borrowings) are estimated to be 1% higher than the budget estimates.
Revenue surplus in 2024-25 is estimated to be Rs 1,121 crore (0.1% of GSDP). As per the revised estimates, the state is expected
to observe a revenue deficit of Rs 35,530 crore in 2023-24 (4.1% of GSDP). In 2023-24, revenue surplus of Rs 4,479 crore was
estimated at the budget stage (0.5% of GSDP).
Fiscal deficit for 2024-25 is targeted at 3% of GSDP (Rs 29,095 crore). In 2023-24, as per the revised estimates, fiscal deficit is
expected to be 8.9% of GSDP, significantly higher than budgeted (3% of GSDP).
Policy Highlights
Women self-help groups: Jeevika will be expanded to provide for women self-help groups in urban areas.
Support to students from backward classes: More exams will be covered under the scheme to provide a one-time cash transfer
upon clearing the preliminary round of competitive examinations.
Grants to small entrepreneurs: To improve the financial situation of poor households, a scheme to provide a grant of two lakh
rupees for setting up a small business has been approved. The outlay towards this scheme is estimated to be Rs 1,000 crore in
2024-25.
Bihar’s Economy
GSDP: In 2022-23, Bihar’s GSDP (at constant prices) is Figure 1 : Growth in GSDP and sectors in Bihar at
estimated to grow at 10.6%. Bihar’s GSDP is estimated to constant prices (2011-12)
grow at a higher rate than the national GDP (7.2%) in 2022-23.
Sectors: In 2022-23, the agriculture, manufacturing and
service sectors are estimated to grow by 6.7%, 6.8%, and 13%
respectively. In 2022-23, agriculture, manufacturing, and
services are estimated to contribute 25%, 17%, and 58% to the
economy, respectively (at current prices).
Per capita GSDP: The per capita GSDP of Bihar in 2022-23
(at current prices) is estimated at Rs 59,637, an increase of 14%
over the previous year. In 2022-23, per capita GDP at the
national level is estimated to be significantly higher (Rs
1,96,983). Note: Agriculture also includes mining and quarrying; manufacturing
Unemployment: As per the Periodic Labour Force Survey also includes construction, and electricity, gas, water, and other utility
(July 2022-June 2023), the unemployment rate in Bihar was services. These numbers are as per constant prices (2011-12) which
3.9%, higher than the national level (3.2%). Unemployment in implies that the growth rate is adjusted for inflation.
the 15-29 years age group was 13.9%, also higher than the Sources: Bihar Economic Survey 2023-24; PRS.
national level (10%).
Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 2,56,333 crore. This is a decrease of 12% over the
revised estimates for 2023-24. This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,27,238
crore and net borrowings of Rs 29,295 crore. Total receipts for 2024-25 (other than borrowings) are expected to register an
increase of 5.7% over the revised estimates for 2023-24.
Revenue surplus in 2024-25 is estimated to be Rs 1,121 crore (0.1% of GSDP). In comparison, in 2023-24, the state is expected
to observe a revenue deficit of Rs 35,530 crore (4.1% of GSDP). Fiscal deficit for 2024-25 is targeted at 3% of GSDP (Rs
29,095 crore), which is within the limit of 3.5% of GSDP permitted by the central government (of which 0.5% of GSDP becomes
available upon undertaking power sector reforms).
In 2023-24, as per revised estimates, deficit levels are expected to be significantly higher than budget estimates. This is owing to
significantly higher expenditure estimated at the revised stage (22%), without a similar increase expected in receipts (1% higher
than budgeted). Fiscal deficit in 2023-24 is expected to be 8.9% of GSDP as per the revised estimates. Given that the estimated
fiscal deficit is significantly above the permitted fiscal deficit limit for the year (3.5% of GSDP), these revised estimates are
unlikely to hold. Hence, actual expenditure in 2023-24 might be significantly lower than the revised estimate.
% change from
2022-23 2023-24 2023-24 % change from BE 2024-25
Items RE 23-24 to BE
Actuals Budgeted Revised 23-24 to RE 23-24 Budgeted
24-25
of which
8,456 0 10,058 - 0 -100%
special loan for capex from centre*
Note: BE is Budget Estimates; RE is Revised Estimates. *The central government has been providing 50-year interest free loan to states for capital
expenditure, which are over and above the permitted borrowing ceiling for a given financial year.
Sources: Annual Financial Statement, Budget in Brief, FRBM Statement, Bihar Budget 2024-25; PRS.
Expenditure in 2024-25
Revenue expenditure for 2024-25 is proposed to be Rs 2,25,677 crore, a decrease of 10% over the revised estimates for 2023-24.
This includes the expenditure on salaries, pensions, interest, grants, and subsidies. In 2023-24, revenue expenditure is estimated to
be 20% higher than the budget estimates.
Capital outlay for 2024-25 is proposed to be Rs 29,416 crore, a decrease of 26% over the revised estimates for 2023-24. Capital
outlay indicates the expenditure towards creation of assets. In 2023-24, as per revised estimates, capital outlay is expected to be
35% higher than the budget estimates.
Loans given by the state 2,057 1,221 1,745 43% 1,240 -29%
Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.
These expenditure items are difficult to rationalise in short-term. A larger proportion of budget allocated for committed expenditure
limits the state’s flexibility to decide on other developmental expenditure priorities such as capital outlay. In 2024-25, Bihar is estimated
to spend Rs 92,882 crore on committed expenditure, which is 41% of its estimated revenue receipts. This comprises spending on salaries
(18% of revenue receipts), pension (14%), and interest payments (9%). In 2024-25, expenditure towards salaries is estimated to be
register an increase of 24% over the revised estimates for 2023-24. In 2022-23, as per actuals, 36% of revenue receipts were spent
towards committed expenditure.
Sector-wise expenditure: The sectors listed below account for 66% of the total expenditure on sectors by the state in 2024-25. A
comparison of Bihar’s expenditure on key sectors with that by other states is shown in Annexure 1.
% change
2022-23 2023-24 2023-24 2024-25 from RE
Sector Budget Provisions for 2024-25
Actuals Budgeted Revised Budgeted 23-24 to
BE 24-25
% of total
expenditure 65% 65% 68% 66% -
on all sectors
Receipts in 2024-25
Total revenue receipts for 2024-25 are estimated to be Rs 2,26,798 crore, an increase of 6% over the revised estimates for 2023-
24. Of this, Rs 61,626 crore (27%) will be raised by the state through its own resources, and Rs 1,65,173 crore (73%) will
come from the centre. Resources from the centre will be in the form of state’s share in central taxes (50% of revenue receipts) and
grants (23% of revenue receipts).
Devolution: In 2024-25, the state’s share in central taxes is estimated at Rs 1,13,012 crore, an increase of 10% over the revised
estimates for 2023-24. As per the interim Union budget 2024-25, Bihar’s share in central taxes is estimated to be Rs 1,22,686
crore in 2024-25.
Grants from the centre in 2024-25 are estimated at Rs 52,161 crore, a decrease of 5% over the revised estimates for 2023-24.
State’s own tax revenue: Bihar’s total own tax revenue is estimated to be Rs 54,300 crore in 2024-25, an increase of 8% over the
revised estimates for 2023-24. Own tax revenue as a percentage of GSDP is estimated at 5.6% in 2024-25, lower than the revised
estimates for 2023-24 (5.9%). As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 5.9%.
In 2024-25, State GST (SGST) is estimated to be the largest source of own tax revenue (58% of own tax revenue). SGST revenue
is estimated to increase by only 1% over the revised estimates for 2023-24. However, compared to actual collection in 2022-23,
SGST revenue in 2024-25 is estimated to register an annualised increase of 17%.
Revenue from Sales Tax/ VAT in 2024-25 (Rs 10,010 crore) is expected to register an increase of 26% over the revised estimates
for 2023-24.
Stamps Duty and Registration Fees 6,451 6,300 7,000 11% 7,500 7%
State Excise 1 - - - 0 -
Sources: Annual Financial Statement, Detailed Statement on Revenue and Capital Receipts, Bihar Budget 2024-25; PRS.
The Bihar Fiscal Responsibility and Budget Management Act, 2006 provides annual targets to progressively reduce the outstanding
liabilities, revenue deficit and fiscal deficit of the state government.
Revenue surplus: It is the difference of revenue receipts and revenue expenditure. A revenue surplus implies that the government’
revenue is sufficient to cover expenses which do not increase its assets or reduces its liabilities. The budget estimates a revenue surplus
of Rs 1,121 crore (0.1% of the GSDP) in 2024-25. Between 2019-20 and 2023-24 (as per revised estimates), the state has persistently
observed a revenue deficit, which implies that it has relied on borrowings to meet its revenue expenditure.
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. In 2024-25, the fiscal deficit is estimated to be 3% of GSDP. In 2023-24, as per revised estimates, fiscal
deficit is expected to be 8.9% of GSDP.
For both 2023-24 and 2024-25, the central government has permitted fiscal deficit of up to 3.5% of GSDP to states, of which 0.5% of
GSDP will be available upon carrying out certain power sector reforms. Unutilised fiscal deficit limit from years since 2021-22 may also
be utilised in subsequent years. In addition, the central government has been providing 50-year interest free loans for capital expenditure
over and above the yearly borrowing limit since 2020-21. Additional borrowing to the extent of yearly contributions to NPS have also
been permitted in 2022-23 and 2023-24.
In 2022-23, fiscal deficit was 6% of GSDP, significantly higher than the unconditional limit of 3.5% of GSDP for that year. As per
budget documents, reasons for higher deficit include special loan for capital expenditure from centre (Rs 8,486 crore, i.e., 1.1% of
GSDP), and certain account adjustments from suspense account.
Outstanding liabilities: Outstanding liabilities is the accumulation of total borrowings at the end of a financial year. It also includes any
liabilities on public account. At the end of 2024-25, the outstanding liabilities are estimated to be 35.7% of GSDP, the same as the budget
estimates for 2023-24.
Note: Positive (+) figures indicate a surplus and negative (-) figures indicate
a deficit; *Figures for 2025-26 and 2026-27 are projections; For 2020-21
Note: *Figures for 2025-26 and 2026-27 are projections; RE is Revised
and 2021-22, deficits reported without treating GST compensation loans as
Estimates; BE is budget estimates.
grants. RE is Revised Estimates; BE is budget estimates.
Sources: FRBM Statement, Budget in Brief, Bihar Budget 2024-25; PRS.
Sources: FRBM Statement, Bihar Budget 2024-25; PRS.
Outstanding Government Guarantees: Outstanding liabilities of states do not include a few other liabilities that are contingent in
nature, which states may have to honour in certain cases. State governments guarantee the borrowings of State Public Sector Enterprises
(SPSEs) from financial institutions. As of March 31, 2023, the state’s outstanding guarantee is estimated to be Rs 25,257 crore, which is
3% of Bihar’s GSDP in 2022-23. Of these guarantees, 52% belong to the power sector (Rs 13,008 crore).
The graphs below compare Bihar’s expenditure in 2024-25 on six key sectors as a proportion of its total expenditure on all sectors. The
average for a sector indicates the average expenditure in that sector by 31 states (including Bihar) as per their budget estimates of 2023-
24. [1]
Education: Bihar has allocated 21.4% of its expenditure on education in 2024-25. This is significantly higher than the average
allocation for education by states in 2023-24 (14.7%).
Health: Bihar has allocated 5.7% of its total expenditure towards health, which is lower than the average allocation for health by
states (6.2%).
Rural development: Bihar has allocated 10.6% of its expenditure on rural development. This is significantly higher than the
average allocation for rural development by states (5%).
Agriculture: Bihar has allocated 3.1% of its expenditure towards agriculture. This is significantly lower than the average
allocation towards agriculture by states (5.9%).
Police: Bihar has allocated 5.3% of its total expenditure towards police, which is higher than the average expenditure on police by
states (4.2%).
Roads and bridges: Bihar has allocated 3% of its total expenditure towards roads and bridges, which is lower than the average
allocation by states (4.6%).
Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Bihar.
Sources: Annual Financial Statement, Bihar Budget 2024-25; various state budgets; PRS.
The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry .
The following tables compare the actuals of 2022-23 with budget estimates for that year.
State Excise 0 1 -
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Disclaimer: This data is being furnished to you for your information. PRS makes every effort to use reliable and comprehensive information, but PRS does not represent
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