The Finance Minister, Captain Abhimanyu Singh Sandhu, presented the Budget for Haryana for the financial year 2019-20 on February 25, 2019.

Budget Highlights

  • The Gross State Domestic Product of Haryana for 2019-20 (at current prices) is estimated to be Rs 7,84,910 This is 11% higher than the estimate for 2018-19. 
  • Total expenditure for 2019-20 is estimated to be Rs 1,32,166 crore, a 9.8% increase over the revised estimate of 2018-19. In 2018-19, there is estimated to be an increase of Rs 5,177 crore (4.5% of the budgeted estimate) of expenditure as per the revised estimate.
  • Total receipts (excluding borrowings) for 2019-20 are estimated to be Rs 89,447 crore, an increase of 8.8% as compared to the revised estimate of 2018-19. In 2018-19, total receipts (excluding borrowings) are estimated to fall short of the budgeted estimate by Rs 1,087 crore (1.3%).
  • Revenue deficit for the next financial year is targeted at Rs 12,022 crore, or 1.53% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 24,240 crore (3.09% of GSDP).  
  • The sectors of Rural Development (24%), Social Welfare and Nutrition (13%), and Health and Family Welfare (12%) saw the highest increase in allocations.

Policy Highlights

  • Agriculture and allied sectors: Two new schemes were announced in the Budget Speech which aim at providing financial and social security to: (i) families of cultivating farmers in possession of land up to five acres, and (ii) families of workers in unorganised sector with a family income of less than Rs 15,000 per month.  An amount of Rs 1,500 crore has been allocated for the same. 
  • Infrastructure projects: In order to upgrade the infrastructure of the state, the government will reconstruct 2,300 dilapidated bridges from 2019-20 to 2023-24.  The government will also construct the SYL Canal to get the state’s share of water from the river Ravi-Beas.  An amount of Rs 100 crore has been allocated for the construction of the canal.
  • Irrigation: The government is implementing a scheme to provide solar water pumping systems to farmers to meet their irrigation needs.  Under the scheme, farmers are provided with 2 HP and 5 HP solar water pumping systems with a state subsidy of 75%.  It was announced that 50,000 off-grid solar pumps of 3 HP to 10 HP capacity will be installed in two phases.

Haryana’s Economy

·         GSDP:  The growth rate of Haryana’s GSDP (at current prices) has increased from 9.2% in 2014-15 to 12.8% in 2016-17.

·         Sectors:  In 2016-17, agriculture, manufacturing, and services contributed to 19%, 31% and 50% of the GSVA respectively.  These sectors grew by 13.2%, 9% and 13.7%, respectively.

·         Per capita income:  The per capita GSDP of Haryana in 2016-17 (at current prices) was Rs 1,99,612.  This is 11.2% higher than that in 2015-16. 

·         Unemployment:  According to the 5th Annual Employment-Unemployment Survey (2015-16), among the major states, Haryana had an unemployment rate of 4.7% as compared to the all-India level of 5%. 

 

Figure 1: Growth in GSDP and sectors in Haryana (year-on-year)

Note: All numbers are as per current prices.

Sources: MOSPI; PRS.

Budget Estimates for 2019-20

  • The total expenditure in 2019-20 is targeted at Rs 1,32,166 crore. This is 9.8% higher than the revised estimates of 2018-19.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 89,447 crore and borrowings of Rs 42,767 crore.  Total receipts for 2019-20 (other than borrowings) are expected to be 8.8% higher than the revised estimate of 2018-19. 

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

Items

2017-18 Actuals

2018-19 Budgeted

2018-19 Revised

% change from BE 2018-19 to RE 2018-19

2019-20 Budgeted

% change from RE 2018-19 to BE 2019-20

Total Expenditure

94,529

1,15,198

1,20,375

4.5%

1,32,166

9.8%

A. Receipts (except borrowings)

69,076

83,333

82,246

-1.3%

89,447

8.8%

B. Borrowings

21,490

31,833

34,773

9.2%

42,767

23.0%

Total Receipts (A+B)

90,565

1,15,166

1,17,019

1.6%

1,32,214

13.0%

Revenue Deficit

10,562

8,254

8,507

3.1%

12,022

41.3%

As % of GSDP

1.69%

1.17%

1.20%

 

1.53%

 

Fiscal Deficit

19,154

20,439

20,573

0

24,240

17.8%

As % of GSDP

3.06%

2.89%

2.91%

 

3.09%

 

Notes: BE is Budget Estimate; RE is Revised Estimate.  GSDP for 2019-20 is Rs 7,84,910 crore.  GSDP for 2018-19 BE and 2018-19 RE taken to be Rs 7,07,126 crore. 

Sources: Haryana Budget Documents 2019-20; PRS.

  • Revenue deficit: It is the excess of revenue expenditure over revenue receipts.  A revenue deficit implies that the government needs to borrow in order to finance its expenses which do not create capital assets.  The government has estimated a revenue deficit of Rs 12,022 crore in 2019-20 (or 1.53% of GSDP).  This is 41.3% higher than the revised estimate for 2018-19. 
  • Fiscal deficit: It is the excess of expenditure over receipts.  This gap is filled by borrowings by the government and leads to an increase in total liabilities.  In 2019-20, fiscal deficit of Rs 24,240 crore (or 3.09% of GSDP) is estimated.  This is an increase of Rs 3,667 crore (or 17.8%) over the revised estimate of 2018-19.

Expenditure in 2019-20

  • Capital expenditure for 2019-20 is proposed to be Rs 37,924 crore, which is an increase of 8.2% over the revised estimates 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. 
  • Haryana’s capital outlay for 2019-20 is estimated to be Rs 16,260 crore, which is 1.9% higher than the revised estimate of 2018-19.
  • Revenue expenditure for 2019-20 is proposed to be Rs 94,242 crore, which is an increase of 10.4% over revised estimates of 2018-19. This expenditure includes payment of salaries, maintenance, etc. 

Table 2: Expenditure budget 2019-20 (in Rs crore)

Items

2017-18 Actuals

2018-19 Budgeted

2018-19 Revised

% change from BE 2018-19 to RE 2018-19

2019-20 Budgeted

% change from RE 2018-19 to BE 2019-20

Capital Expenditure

21,272

30,012

35,041

16.8%

37,924

8.2%

of which Capital Outlay

13,538

15,780

15,964

1.2%

16,260

1.9%

Revenue Expenditure

73,257

85,187

85,335

0.2%

94,242

10.4%

Total Expenditure

94,529

1,15,198

120,375

4.5%

1,32,166

9.8%

A. Debt Repayment

6,339

12,466

17,596

41.2%

20,257

15.1%

B. Interest Payments

11,961

14,037

13,847

-1.4%

16,633

20.1%

Debt Servicing (A+B)

18,300

26,503

31,443

18.6%

36,890

17.3%

Note: Capital outlay denotes expenditure which leads to creation of assets.

Sources: Haryana Budget Documents 2019-20; PRS. 

 

Sector expenditure in 2019-20

The sectors listed below account for 58% of the total budgeted expenditure of Haryana in 2019-20.  A comparison of Haryana’s expenditure on key sectors with that by other states can be found in the Annexure.

Table 3: Sector-wise expenditure for Haryana Budget 2019-20 (Rs crore)

Sector

2017-18

Actuals

2018-19

Budgeted

2018-19

Revised

2019-20

Budgeted

% change from RE 2018-19 to BE 2019-20

Budget provisions for 2019-20

Education

12,187

14,935

14,383

15,346

7%

·         Rs 6,101 crore and Rs 3,389 crore has been allocated towards government primary and secondary schools, respectively.

Energy

13,086

12,076

13,778

13,172

-4%

·         Rs 2,127 crore will be spent towards interest payments under the UDAY scheme.

Water Supply, Sanitation, Housing and Urban Development

7,993

9,553

9,460

9,691

2%

·         Rs 400 crore each has been allocated towards Smart Cities and AMRUT Missions. 

Social Welfare and Nutrition

6,447

7,854

7,622

8,645

13%

·         Rs 4,865 crore has been allocated towards providing pension under various social security schemes. 

Transport

4,685

5,446

5,000

5,442

9%

·         Rs 2,261 crore has been allocated towards development of Haryana Roadways.

·         Rs 833 crore has been allocated towards Roads and Bridges.

Rural Development

2,981

4,332

4,309

5,365

24%

·         Rs 500 crore has been allocated towards Haryana Gramin Vikas Yojana.

·         Rs 1,177 crore has been allocated as assistance to Gram Panchayats on the recommendation of the 14th Finance Commission.

Police

3,802

4,687

4,799

5,043

5%

·         Rs 3,206 crore and Rs 450 crore have been allocated for district police and special police force, respectively. 

Health and Family Welfare

3,376

4,769

4,475

5,016

12%

·         Rs 1,094 crore has been allocated towards hospitals and dispensaries.

·         Rs 995 crore has been allocated towards Primary Health Centres in rural areas. 

Agriculture and allied activities

4,086

4,660

4,516

4,539

1%

·         In the Budget Speech, an amount of Rs 1,500 crore was announced for providing financial and social security to farmers and workers in the unorganized sector.

Irrigation and Flood Control

2,437

3,322

3,204

3,400

6%

·         Rs 711 crore has been allocated towards the West Jamuna Canal Project.

Welfare of SC/ ST/OBC and Minorities

400

738

513

516

1%

·         Rs 177 crore has been allocated for post-matric scholarships for SC and backward classes.

% of total expenditure

65%

63%

60%

58%

 

 

Source: Haryana Budget Speech 2019-20, Haryana Annual Financial Statement 2019-20, Haryana Demand for Grants 2019-20; PRS.

Receipts in 2019-20

In 2019-20, Haryana estimates to receive Rs 21,089 crore from the centre.  Of this, the share in central taxes is Rs 11,217 crore, which is a 36% increase from the revised estimate of 2018-19.  Note that, in 2018-19, the share in central taxes decreased by 11.2% (Rs 1,045 crore) 

As per the revised estimate of 2018-19, grants received by the state from the central government increased by 18.2% from the budget estimate.  In 2019-20, these grants are estimated to further increase by 16%, to Rs 9,873 crore. 

  • The total revenue receipts for 2019-20 are estimated to be Rs 82,219 crore, an increase of 7% over the revised estimates of 2018-19. Of this, Rs 61,130 (74% of the revenue receipts) crore will be raised by the state through its own resources, and Rs 21,089 crore (26% of the revenue receipts) will be devolved by the centre in the form of grants and the state’s share in taxes.
  • Non Tax Revenue: Haryana has estimated to generate Rs 10,025 crore through non-tax sources in 2019-20. Of this, Rs 1,623 crore will be received as interest from various departmentally commercial and public sector undertakings.

Table 5: Break up of state government receipts (Rs crore)

Items

2017-18 Actuals

2018-19 Budgeted

2018-19 Revised

% change from BE 2018-19 to RE 2018-19

2019-20 Budgeted

% change from RE 2018-19 to BE 2019-20

State's Own Tax

41,099

49,132

50,946

3.7%

51,105

0.3%

State's Own Non-Tax

9,113

11,303

9,120

-19.3%

10,025

9.9%

Share in Central Taxes

7,298

9,300

8,255

-11.2%

11,217

35.9%

Grants-in-aid from Centre

5,185

7,199

8,507

18.2%

9,873

16.1%

Total Revenue Receipts

62,695

76,933

76,828

-0.1%

82,219

7.0%

Borrowings

21,490

31,833

34,773

9.2%

42,767

23.0%

Other receipts

6,381

6,400

5,418

-15.3%

7,227

33.4%

Total Capital Receipts

27,871

38,233

40,191

5.1%

49,995

24.4%

Total Receipts

90,565

1,15,166

1,17,019

1.6%

1,32,214

13.0%

Note: All numbers have been rounded off to the nearest decimal.

Sources: Haryana Budget Documents 2019-20; PRS.

  • Tax Revenue: Total own tax revenue of Haryana is estimated to be Rs 51,105 crore in 2019-20.  The composition of the state’s tax revenue is shown in Figure 2.  The tax to GSDP ratio is targeted at 6.5% in 2019-20, which is in the same range as the revised estimate of 7% in 2018-19.  This implies that growth in collection of taxes has been at par with the growth in the economy.

Figure 2: Composition of the state’s tax revenue in 2019-20 (Budget Estimates)

Note: The chart excludes some other taxes which form the rest 1% of the state tax revenue.

Sources: Haryana Annual Financial Statement 2019-20; PRS.

·         State Goods and Services Tax (SGST) is the largest component of tax revenue for the state (45%).  It is expected to generate Rs 22,750 crore in 2019-20.  This is a 4% decrease from the revised estimates of 2018-19.

·         In 2019-20, Haryana is expected to generate Rs 10,900 crore through levy of sales tax (on items such as petroleum products), and VAT.  This is a decrease of 3% over the revised estimates of 2018-19. 

·         Further, in 2019-20 the state is expected to generate Rs 7,000 crore from state excise duty, and Rs 6,500 crore from stamp duty and registration fees.  This is an increase of 9% and 8% respectively, from the revised estimates of 2018-19. 

 Annexure

The graphs below compare Haryana’s expenditure on four key sectors as a proportion of its total budget, with 26 other states (using budget estimates of 2018-19).[1] 

  • Education: Haryana has allocated 13.9% of its expenditure on education in 2019-20.  This is lower than the average expenditure allocated to education by other states. 
  • Health: Haryana has allocated 4.5% of its total expenditure on health, which is marginally lower than the average expenditure of other states.
  • Agriculture and allied activities: The state has allocated 4.1% of its total budget towards agriculture and allied activities.  This is lower than the allocations of other states (6.4%).
  • Rural development: Haryana has allocated 4.9% of its expenditure on rural development.  This is lower than the average (6.1%) of the other states.
  • Roads and bridges: Haryana has allocated 2.5% of its total expenditure on roads and bridges, which is lower than the average expenditure of other states.
  • Police: Haryana has allocated 4.6% of its total expenditure on police, which is higher than the average expenditure of other states (3.9%).

Note: 2017-18, 2018-19 (BE), 2018-19 (RE), and 2019-20 (BE) figures are for Haryana.

Source: Annual Financial Statement (2018-19 and 2019-20), various state budgets; PRS.

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[1] The 26 other states include all states except Arunachal Pradesh, Manipur, and Meghalaya.  It also includes the Union Territory of Delhi.