The Deputy Chief Minister of Arunachal Pradesh, Mr. Chowna Mein, presented the Budget for the state for the financial year 2024-25 on July 24, 2024.

Budget Highlights

  • Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 34,270 crore, an increase of 3.6% over the revised estimates of 2023-24.  In addition, debt of Rs 1,195 crore will be repaid by the state.

  • Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 31,277 crore, an increase of 6.7% compared to the revised estimate of 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 11.2% of GSDP (Rs 5,335 crore), lower than the revised estimates for 2023-24 (11.9% of GSDP).  In 2023-24, the revenue surplus is expected to be higher than the budget estimate (8.1% of GSDP).

  • Fiscal deficit for 2024-25 is targeted at 6.3% of GSDP (Rs 2,993 crore).   In 2023-24, as per the revised estimates, fiscal deficit is expected to be 7.8% of GSDP, higher than the budget estimate for 2023-24 (6.6%).

Policy Highlights

  • Tourism: Promotion of eco-tourism will be given priority.  This will involve development of lakes and wildlife sanctuaries such as the Daying Ering Wildlife Sanctuary.

  • Dulari Kanya Scheme: The scheme will be revamped to offer incentives up to Rs 50,000 to women enrolling in graduation or professional courses.

  • Agriculture:  A new ‘farm to fork’ Agricultural and Horticultural Policy will be notified.  It will focus on natural farming, enhanced market linkages and export of fruits, vegetables, and flowers.

Arunachal Pradesh’s Economy

  • GSDP:  In 2023-24, state’s GSDP (at constant prices) grew at 9.5%, compared to 7% in 2022-23.  In comparison, national GDP is estimated to grow at 8.2% in 2023-24.

  • Sectors:  At constant prices, the agriculture sector grew by 1.2% in 2023-24.  In comparison, it had witnessed 2.6% growth in 2022-23.  Manufacturing sector grew by 12% in 2023-24, compared to 13% in 2022-23.  Services grew by 8% in 2023-24.  In comparison, it had grown by 13% in 2022-23.

  • In 2023-24, agriculture, manufacturing, and services sectors are estimated to contribute 36%, 24%, and 40% to the economy, respectively (at current prices).

  • Per capita GSDP:  The per capita GSDP of Arunachal Pradesh in 2023-24 (at current prices) is estimated at Rs 2,80,380, an increase of 10% over 2022-23.

Figure  1 : Growth in GSDP and sectors in Arunachal Pradesh at constant prices (2011-12)

image

Note: Agriculture also includes mining and quarrying; manufacturing also includes construction, and electricity, gas, water, and other utility services.  These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation.
Sources: Arunachal Pradesh Budget Documents for 2024-25; PRS.


 Budget Estimates for 2024-25

  • Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 34,270 crore.  This is an increase of 3.6% over the revised estimate of 2023-24.   This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 31,277 crore and net borrowings of Rs 3,369 crore.  In 2023-24, revised estimate for expenditure (other than debt repayment) saw an increase of 15.3% compared to the budget estimate.   This was primarily due to higher capital outlay.  Net receipts for 2024-25 (other than borrowings) are expected to register an increase of 6.7% over the revised estimate of 2023-24.  Revised estimate for receipts (excluding borrowings) in 2023-24 were 12% higher compared to the budget estimate.  The increase was due to higher grants-in-aid from centre.

  • Revenue surplus in 2024-25 is estimated to be 11.2% of GSDP (Rs 5,335 crore), lower than the revised estimates for 2023-24 (11.9% of GSDP).  Fiscal deficit for 2024-25 is targeted at 6.3% of GSDP (Rs 2,993 crore), lower than the revised estimates for 2023-24 (7.8% of GSDP).

Table  1 : Budget 2024-25 - Key figures (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Total Expenditure

26,081

29,513

33,989

15.2%

35,465

4.3%

(-) Repayment of debt

551

830

909

9.5%

1,195

31.5%

Net Expenditure (E)

25,530

28,683

33,081

15.3%

34,270

3.6%

Total Receipts

26,271

29,657

34,056

14.8%

35,841

5.2%

(-) Borrowings

2,480

3,490

4,733

35.6%

4,563

-3.6%

Net Receipts (R)

23,792

26,168

29,323

12.1%

31,277

6.7%

Fiscal Deficit (E-R)

1,738

2,515

3,758

49.4%

2,993

-20.4%

as % of GSDP

4.6%

6.6%

7.8%

 

6.3%

 

Revenue Surplus

6,370

3,063

5,711

86.5%

5,335

-6.6%

as % of GSDP

16.8%

8.1%

11.9%

 

11.2%

 

Primary Deficit

904

1,623

2,846

75.3%

2,037

-28.4%

as % of GSDP

2.4%

4.3%

5.9%

 

4.3%

 

GSDP

37,870

37,870

48,028

26.8%

47,823

-0.4%

Note: BE is Budget Estimates; RE is Revised Estimates.  Calculation for fiscal deficit includes 50 years interest free special assistance loans given by the Centre for capital expenditure.
Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS.

Expenditure in 2024-25

  • Revenue expenditure for 2024-25 is proposed to be Rs 25,932 crore, an increase of 10% over the revised estimate of 2023-24.  This includes the expenditure on salaries, pension, interest, grants, and subsidies.

  • Capital outlay for 2024-25 is proposed to be Rs 8,335 crore, a decrease of 12% over the revised estimate of 2023-24.  Capital outlay includes the expenditure towards creation of assets.  In 2023-24, revised estimate for capital outlay is 70% higher than budget estimate.  This was driven by higher capital outlay on sectors such as police, education, agriculture, irrigation, and transport.

Table  2 :  Expenditure budget 2024-25 (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Revenue Expenditure

17,418

23,095

23,602

2%

25,932

10%

Capital Outlay

8,107

5,584

9,475

70%

8,335

-12%

Loans given by the state

5

4

4

-14%

3

-16%

Net Expenditure

25,530

28,683

33,081

15.3%

34,270

4%

Sources:  Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS.

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pension, and interest. A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital outlay.  In 2024-25, Arunachal Pradesh is estimated to spend Rs 13,181 crore on committed expenditure, which is 42% of its estimated revenue receipts.  This comprises spending on salaries (32% of revenue receipts), pension (7%), and interest payments (3%).  In 2023-24, expenditure towards salaries and pension are estimated to be 23% and 16% lower than the budget estimate respectively.  In 2022-23, as per actuals, 37% of revenue receipts were spent towards committed expenditure.

Table  3 : Committed Expenditure in 2024-25 (in Rs crore)

Committed Expenditure

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Salaries

6,233

8,935

6,838

-23%

9,920

45%

Pension

1,665

2,519

2,117

-16%

2,305

9%

Interest payment

834

892

912

2%

956

5%

Total Committed Expenditure

8,733

12,346

9,867

-20%

13,181

34%

Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS.

Sector-wise expenditure: The sectors listed below account for 65% of the total expenditure on sectors by the state in 2024-25.  A comparison of Arunachal Pradesh’s expenditure on key sectors with that by other states is shown in Annexure 1.

Table  4 : Sector-wise expenditure under Arunachal Pradesh Budget 2024-25 (in Rs crore)

Sector

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Roads and Bridges

4,654

3,272

6,045

4,210

-30%

Education, Sports, Arts, and Culture

3,034

2,838

3,594

4,087

14%

Energy

1,969

2,158

2,769

2,733

-1%

Agriculture and Allied Activities

1,700

2,179

2,399

2,657

11%

Health and Family Welfare

1,578

1,500

1,791

1,767

-1%

Police

1,346

1,319

1,474

1,689

15%

Rural Development

1,179

946

1,665

1,549

-7%

Water Supply and Sanitation

1,064

1,214

1,485

1,350

-9%

Social Welfare and Nutrition

720

951

1,002

1,148

15%

Irrigation and Flood Control

698

631

1,205

1,147

-5%

% of total expenditure on all sectors

70%

59%

71%

65%

 

Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS. 

Receipts in 2024-25

  • Total revenue receipts for 2024-25 are estimated to be Rs 31,267 crore, an increase of 7% over the revised estimate of 2023-24.  Of this, Rs 4,007 crore (13%) will be raised by the state through its own resources, and Rs 27,261 crore (87%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (68% of revenue receipts) and grants (19% of revenue receipts).

  • Devolution:  In 2024-25, state’s share in central taxes is estimated at Rs 21,432 crore, an increase of 10% over the revised estimate of 2023-24.

  • Grants from the centre in 2024-25 are estimated at Rs 5,829 crore, a decrease of 9% over the revised estimates for 2023-24.  In 2023-24, revised estimate for grants from the centre is 34% higher than budget estimate.   This was primarily due to an increase of Rs 1,630 crore (41%) in central assistance for centrally sponsored schemes. 

  • State’s own tax revenue:  Arunachal Pradesh’s total own tax revenue is estimated to be Rs 2,953 crore in 2024-25, an increase of 15% over the revised estimate of 2023-24.  Own tax revenue as a percentage of GSDP is estimated at 6.2% in 2024-25, higher than the revised estimates for 2023-24 (5.3%).  As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 5.9%.

Table  5 : Break-up of the state government’s receipts (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 2023-24 to RE 2023-24

2024-25 Budgeted

% change from RE 2023-24 to BE 2024-25

State's Own Tax

2,237

2,565

2,568

0%

2,953

15%

State's Own Non-Tax

1,018

848

911

7%

1,054

16%

Share in Central Taxes

16,689

17,947

19,406

8%

21,432

10%

Grants-in-aid from Centre

3,844

4,798

6,428

34%

5,829

-9%

Revenue Receipts

23,788

26,158

29,313

12%

31,267

7%

Non-debt Capital Receipts

3

10

10

0%

10

0%

Net Receipts

23,792

26,168

29,323

12.1%

31,277

7%

Note: BE is Budget Estimates; RE is Revised Estimates. 
Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS.

  • In 2024-25, State GST is estimated to be the largest source of own tax revenue (74% share).  In 2024-25, all major sources of the state’s own-tax revenue are expected to see an increase of 15% compared to the revised estimates of 2023-24.

Table  6 :  Major sources of state’s own-tax revenue (in Rs crore)

Head

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

State GST

1,607

1,959

1,912

-2%

2,199

15%

Sales Tax/ VAT

222

288

321

12%

369

15%

State Excise

281

242

256

6%

294

15%

Taxes on Vehicles

62

40

41

2%

47

15%

Land Revenue

48

22

24

7%

27

15%

Stamps Duty and Registration Fees

18

14

14

-1%

16

15%

Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; PRS.

Deficits, Debt, and FRBM Targets for 2024-25

The Arunachal Pradesh 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 expenditure and revenue receipts.  A revenue surplus implies that the government doesn’t need borrow to finance its revenue expenditure.  The budget estimates a revenue surplus of Rs 5,335 crore (or 11.2% of the GSDP) in 2024-25.

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 6.3% of GSDP.  Fiscal deficit includes borrowings and 50-year interest free capital expenditure loans from the central government which is over and above the borrowing limit.  For 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 only upon carrying out certain power sector reforms. 

As per the revised estimates, in 2023-24, the fiscal deficit of the state is expected to be 7.8% of GSDP.  This is higher than the budget estimate of 2023-24 (6.6%). 

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 48% of GSDP, higher than the revised estimate for 2023-24 (41% of GSDP).  The outstanding liabilities significantly increased in 2021-22 (47% of GSDP), and have stayed high thereafter.

Figure  2 : Revenue and Fiscal Balance (% of GSDP)

Title: Chart  

Note: *Figures for 2025-26 and 2026-27 are projections;  RE is Revised Estimates; BE is budget estimates; Fiscal deficit between 2022-23 and 2024-25 have not been adjusted for capital expenditure loans from the central government.
Sources: FRBM Statements, Arunachal Pradesh Budget 2024-25; PRS.

Figure  3 : Outstanding Liabilities (as % of GSDP) image

Note: *Figures for 2025-26 and 2026-27 are projections; RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy, Arunachal Pradesh Budget 2024-25; PRS.

Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Arunachal Pradesh’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 Arunachal Pradesh) as per their budget estimates of 2023-24. [1]

  • Education:  Arunachal Pradesh has allocated 11.9% of its expenditure on education in 2024-25.  This is lower than the average allocation for education by states in 2023-24 (14.7%).

  • Health:  Arunachal Pradesh has allocated 5.2% of its total expenditure towards health, which is lower than the average allocation for health by states (6.2%).

  • Rural development:  Arunachal Pradesh has allocated 4.5% of its expenditure on rural development.  This is lower than the average allocation for rural development by states (5%).

  • Police:  Arunachal Pradesh has allocated 4.9% of its expenditure towards police.  This is higher than the average allocation towards police by states (4.2%).

  • Agriculture:  Arunachal Pradesh has allocated 7.8% of its total expenditure towards agriculture, which is higher than the average expenditure on agriculture by states (5.9%).

  • Energy:  Arunachal Pradesh has allocated 8% of its total expenditure towards energy, which is significantly higher than the average allocation by states (4.7%).

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Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Arunachal Pradesh
Sources: Annual Financial Statement, Arunachal Pradesh Budget 2024-25; various state budgets; PRS.

[1]  The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry.

Annexure 2:  Comparison of 2022-23 Budget Estimates and Actuals

The following tables compare the actuals of 2022-23 with budget estimates for that year.

Table  7 :Overview of Receipts and Expenditure (in Rs crore)

Particular

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Net Receipts (1+2)

24,249

23,792

-2%

1. Revenue Receipts (a+b+c+d)

24,239

23,788

-2%

a. Own Tax Revenue

2,090

2,237

7%

b. Own Non-Tax Revenue

935

1,018

9%

c. Share in central taxes

14,349

16,689

16%

d. Grants-in-aid from the Centre

6,865

3,844

-44%

     Of which GST compensation grants

 

 

 

2. Non-Debt Capital Receipts

10

3

-66%

3. Borrowings

1,863

2,480

33%

      Of which GST compensation loan

-

-

 

Net Expenditure (4+5+6)

24,908

34,044

37%

4. Revenue Expenditure

18,202

25,932

42%

5. Capital Outlay

6,701

8,107

21%

6. Loans and Advances

6

5

-14%

7. Debt Repayment

801

551

-31.2%

Revenue Surplus

6,037

6,370

6%

Revenue Surplus (as % of GSDP)

20.6%

16.8%

 

Fiscal Deficit

660

1,738

163%

Fiscal Deficit (as % of GSDP)

2.2%

4.6%

 

Source: Arunachal Pradesh Budget Documents of various years; PRS.

Table  8 : Key Components of State's Own Tax Revenue

Tax Source/Head

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Sales Tax/ VAT

434

222

-49%

State Excise

253

281

11%

State GST

1,344

1,607

20%

Stamps Duty and Registration Fees

11

18

62%

Taxes on Vehicles

30

62

109%

Land Revenue

18

48

171%

Source: Arunachal Pradesh Budget Documents of various years; PRS.

Table  9 : Allocation towards Key Sectors

Sector

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Social Welfare and Nutrition

996

720

-28%

Agriculture and Allied Activities

2,032

1,700

-16%

Police

1,398

1,346

-4%

Energy

1,723

1,969

14%

Rural Development

1,012

1,179

16%

Water Supply and Sanitation

910

1,064

17%

Education, Sports, Arts, and Culture

2,528

3,034

20%

Health and Family Welfare

1,287

1,578

23%

Irrigation and Flood Control

493

698

42%

Transport

3,422

4,923

44%

of which Roads and Bridges

3,214

4,654

45%

Urban Development

372

593

59%

Housing

59

95

62%

Welfare of SC, ST, OBC, and Minorities

-

11

-

Source: Arunachal Pradesh Budget Documents of various years; PRS.

 

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