The Finance Minister of Madhya Pradesh, Mr. Jagdish Devda, presented the Budget for the state for the financial year 2024-25 on July 3, 2024.
Budget Highlights
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The Gross State Domestic Product (GSDP) of Madhya Pradesh for 2024-25 (at current prices) is projected to be Rs 15,22,220 crore, amounting to growth of 0.6% over 2023-24.
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Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 3,26,381 crore, an increase of 8.9% over the revised estimates of 2023-24. In addition, debt of Rs 29,697 crore will be repaid by the state.
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Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 2,63,817 crore, an increase of 7.6% as compared to the revised estimate of 2023-24.
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Revenue surplus in 2024-25 is estimated to be 0.1% of GSDP (Rs 1,700 crore), higher than the revised estimates for 2023-24 (0.04% of GSDP). In 2023-24, the revenue surplus is expected to be marginally higher than the budget estimate (0.03% of GSDP).
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Fiscal deficit for 2024-25 is targeted at 4.1% of GSDP (Rs 62,564 crore). In 2023-24, as per the revised estimates, fiscal deficit is expected to be 3.6% of GSDP, lower than the budget estimate for 2023-24 (4%).
Policy Highlights
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Expressway network: A proposed expressway network including the Atal Pragati Path (299 km), Narmada Pragati Path (900 km), Vindhya Expressway (676 km), Malwa Nimad Vikas Path (450 km), Bundelkhand Vikas Path (330 km), and Madhya Bharat Vikas Path (746 km) will be built over the next five years.
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Mukhyamantri Sahkari Dugdh Utpadak Protsahan Scheme: The Chief Minister’s Cooperative Milk Production Incentive Scheme will be launched to increase the income of milk producers, with an initial allocation of Rs 150 crore.
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Prison Reforms: The Sudharatmak Sevayein Evam Bandigrih Adhiniyam, 2024, will be enacted to introduce prison reforms. It is based on the Union government's Model Prison Act, 2023.
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Madhya Pradesh’s Economy
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Figure 1: Growth in GSDP and sectors in Madhya Pradesh at constant prices (2011-12) 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. |
Budget Estimates for 2024-25
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Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 3,26,381 crore. This is an increase of 9% over the revised estimates of 2023-24. This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,63,817 crore and net borrowings of Rs 64,734 crore. Total receipts for 2024-25 (other than borrowings) are expected to register an increase of 8% over the revised estimate of 2023-24.
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Revenue surplus in 2024-25 is estimated to be 0.11% of GSDP (Rs 1,700 crore), higher than the revised estimates for 2023-24 (0.04% of GSDP). Fiscal deficit for 2024-25 is targeted at 4.11% of GSDP (Rs 62,564 crore), higher than the revised estimates for 2023-24 (3.6% 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 |
2,68,700 |
3,06,103 |
3,20,753 |
4.8% |
3,56,078 |
11.0% |
|
(-) Repayment of debt |
22,006 |
24,551 |
21,072 |
-14.2% |
29,697 |
40.9% |
|
Net Expenditure (E) |
2,46,694 |
2,81,552 |
2,99,681 |
6.4% |
3,26,381 |
8.9% |
|
Total Receipts |
2,64,358 |
3,05,944 |
3,21,462 |
5.1% |
3,58,248 |
11.4% |
|
(-) Borrowings |
58,867 |
80,100 |
76,230 |
-4.8% |
94,431 |
23.9% |
|
Net Receipts (R) |
2,05,491 |
2,25,843 |
2,45,232 |
8.6% |
2,63,817 |
7.6% |
|
Fiscal Deficit (E-R) |
41,203 |
55,708 |
54,449 |
-2.3% |
62,564 |
14.9% |
|
as % of GSDP |
3.11% |
4.02% |
3.6% |
|
4.11% |
|
|
Revenue Surplus |
4,091 |
413 |
621 |
50.4% |
1,700 |
173.8% |
|
as % of GSDP |
0.31% |
0.03% |
0.04% |
|
0.11% |
|
|
Primary Deficit |
21,749 |
33,088 |
30,456 |
-8.0% |
35,164 |
15.5% |
|
as % of GSDP |
1.6% |
2.4% |
2.0% |
|
2.3% |
|
|
GDP |
13,22,821 |
13,87,117 |
15,13,720 |
9.1% |
15,22,220 |
0.6% |
Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Annual Financial Statement, Madhya Pradesh Budget 2024-25; PRS.
Expenditure in 2024-25
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State Owned Power Sector Units are in Losses In November 2015, the Government of India launched the Ujwal Discom Assurance Yojana with the aim of reducing interest burden, cost of power, and power losses in DISCOMs. The Madhya Pradesh government entered into a Memorandum of Understanding with the state’s DISCOMs and the Ministry of Power in August, 2016. According to this agreement, the state would take over debt amounting to Rs 26,055 crore (75% of the total debt of Madhya Pradesh DISCOMs) as of September 30, 2015 within five years. By 2022, the state government had provided grants amounting to Rs 12,690 crore to cover the debt. As per Revised estimate of 2023-24, Rs 13,365 crore was given to cover the remaining debt. From 2017 to 2022, the Madhya Pradesh government took over the losses of Rs 3,795 crore from the Madhya Pradesh DISCOMs. In 2022-23 and in the revised estimate of 2023-24, no money was allocated to cover the loss of DISCOMs. In 2024-25, Rs 12 crore has been allocated for this purpose. |
Source: State finances audit report for Madhya Pradesh, CAG, 2023
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 |
1,99,895 |
2,25,297 |
2,31,112 |
3% |
2,61,644 |
13% |
|
Capital Outlay |
44,438 |
54,056 |
67,178 |
24% |
61,633 |
-8% |
|
Loans given by the state |
2,360 |
2,198 |
1,391 |
-37% |
3,103 |
123% |
|
Net Expenditure |
2,46,694 |
2,81,552 |
2,99,681 |
6% |
3,26,381 |
9% |
Sources: Annual Financial Statement, Madhya Pradesh Budget 2024-25; PRS.
Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, 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, Madhya Pradesh is estimated to spend Rs 1,17,945 crore on committed expenditure, which is 45% of its estimated revenue receipts. This comprises spending on salaries (25% of revenue receipts), pension (10%), and interest payments (10%). In 2023-24, expenditure towards pensions is estimated to be 5% higher than the budget estimate. In 2022-23, as per actuals, 43% 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 |
48,507 |
61,682 |
57,305 |
-7% |
64,898 |
13% |
|
Pension |
19,691 |
23,011 |
24,058 |
5% |
25,648 |
7% |
|
Interest payment |
19,453 |
22,620 |
23,994 |
6% |
27,400 |
14% |
|
Committed Expenditure |
87,650 |
1,07,313 |
1,05,358 |
-2% |
1,17,945 |
12% |
Sources: Annual Financial Statement, Madhya 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 Madhya Pradesh’s expenditure on key sectors with that by other states is shown in Annexure 1.
Table 4: Sector-wise expenditure under Madhya 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 |
Budget Provisions (2024-25) |
|
Education, Sports, Arts, and Culture |
34,814 |
44,949 |
41,518 |
48,087 |
16% |
|
|
Social Welfare and Nutrition |
11,802 |
20,977 |
26,795 |
34,049 |
27% |
|
|
Energy |
28,355 |
25,276 |
38,070 |
24,891 |
-35% |
|
|
Agriculture and Allied Activities |
14,524 |
17,938 |
19,334 |
22,193 |
15% |
|
|
Health and Family Welfare |
14,022 |
16,299 |
17,476 |
21,714 |
24% |
|
|
Rural Development |
10,806 |
12,528 |
15,317 |
14,918 |
-3% |
|
|
Irrigation and Flood Control |
13,991 |
10,268 |
14,747 |
12,998 |
-12% |
|
|
Police |
7,814 |
9,507 |
9,361 |
10,663 |
14% |
|
|
Water Supply and Sanitation |
7,942 |
9,995 |
9,524 |
9,793 |
3% |
|
|
Transport |
9,352 |
8,848 |
11,236 |
9,386 |
-16% |
|
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% of total expenditure on all sectors |
63% |
63% |
68% |
65% |
-5% |
|
Sources: Annual Financial Statement, Madhya Pradesh Budget 2024-25; PRS.
Receipts in 2024-25
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Total revenue receipts for 2024-25 are estimated to be Rs 2,63,344 crore, an increase of 14% over the revised estimates of 2023-24. Of this, Rs 1,22,700 crore (47%) will be raised by the state through its own resources, and Rs 1,40,645 crore (53%) will come from the centre. Resources from the centre will be in the form of state’s share in central taxes (36% of revenue receipts) and grants (17% of revenue receipts).
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Devolution: In 2024-25, state’s share in central taxes is estimated at Rs 95,753 crore, an increase of 10% over the revised estimates of 2023-24.
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Grants from the centre in 2024-25 are estimated at Rs 44,892 crore, an increase of 12% over the revised estimates for 2023-24. As per revised estimates for 2023-24, grants from the centre were 9% less than the budgeted amount. In 2022-23, the actual amount of grants received from the centre was 17% less than the budget estimate.
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State’s own tax revenue: Madhya Pradesh’s total own tax revenue is estimated to be Rs 1,02,097 crore in 2024-25, an increase of 17% over the revised estimate of 2023-24. Own tax revenue as a percentage of GSDP is estimated at 6.7% in 2024-25, higher than the revised estimates for 2023-24 (5.8%). As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 5.5%.
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 |
72,611 |
86,500 |
87,545 |
1% |
1,02,097 |
17% |
|
State's Own Non-Tax |
19,878 |
14,913 |
17,301 |
16% |
20,603 |
19% |
|
Share in Central Taxes |
74,543 |
80,184 |
86,703 |
8% |
95,753 |
10% |
|
Grants-in-aid from Centre |
36,954 |
44,113 |
40,184 |
-9% |
44,892 |
12% |
|
Revenue Receipts |
2,03,986 |
2,25,710 |
2,31,733 |
3% |
2,63,344 |
14% |
|
Non-debt Capital Receipts |
1,505 |
134 |
13,499 |
10003% |
473 |
-96% |
|
Net Receipts |
2,05,491 |
2,25,843 |
2,45,232 |
8.6% |
2,63,817 |
8% |
BE is Budget Estimates; RE is Revised Estimates.
Sources: Annual Financial Statement, Madhya Pradesh Budget 2024-25; PRS.
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In 2024-25, State GST is estimated to be the largest source of own tax revenue (39% share). State GST revenue is estimated to increase by 25% over the revised estimates of 2023-24.
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Sales Tax/VAT and State Excise is estimated to increase by 5% and 8% respectively over 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 |
23,397 |
32,000 |
32,000 |
0.0% |
40,000 |
25% |
|
Sales Tax/ VAT |
17,719 |
19,514 |
19,557 |
0.2% |
21,000 |
7% |
|
Stamps Duty and Registration Fees |
8,812 |
10,400 |
10,700 |
2.9% |
12,500 |
17% |
|
Taxes on Vehicles |
4,028 |
4,440 |
4,800 |
8.1% |
5,500 |
15% |
|
State Excise |
12,955 |
13,845 |
13,845 |
0.0% |
16,000 |
16% |
|
Land Revenue |
956 |
1,200 |
1,200 |
0.0% |
701 |
-42% |
|
Taxes and Duties on Electricity |
3,498 |
3,858 |
4,200 |
8.9% |
5,000 |
19% |
|
GST Compensation Grants |
4,572 |
4,190 |
4,190 |
0.0% |
1,220 |
-71% |
|
GST Compensation Loans |
0 |
0 |
0 |
- |
0 |
0 |
Sources: Annual Financial Statement, Revenue Budget, and Madhya Pradesh Budget 2024-25; PRS.
Deficits, Debt, and FRBM Targets for 2024-25
The Madhya Pradesh Fiscal Responsibility and Budget Management (FRBM) Act, 2005 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 can be used to incur capital outlay or to repay outstanding debt. The budget estimates a revenue surplus of Rs 1,700 crore (or 0.1% 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 4.1% of GSDP. 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 3.6% of GSDP. This is lower than the budget estimate. Fiscal deficit is projected to be lowered to 3% of GSDP by 2026-27.
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 32% of GSDP, higher than the revised estimate for 2023-24 (28% of GSDP). The outstanding liabilities are projected to remain at 32% of GSDP till 2027-28.
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, 2024, the state’s outstanding guarantee is estimated to be Rs 44,315 crore, which is 3.25% of GSDP in 2023-24.
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Figure 2: Revenue and Fiscal Balance (% of GSDP)
Note: *Figures for 2025-26, 2026-27, and 2027-28 are projections; For 2020-21 and 2021-22, deficits reported without treating GST compensation loans as grants. From 2025-26 to 2027-28 the state is projected to be in marginal revenue surplus. RE is Revised Estimates; BE is budget estimates. |
Figure 3: Outstanding Liabilities (as % of GSDP)
Note: *Figures for 2025-26, 2026-27, and 2027-28 are projections; RE is Revised Estimates; BE is budget estimates. |
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Actual allocation to Panchayati Raj Institutions (PRIs) was less Based on the recommendation of the Third State Finance Commission (which was accepted by the State Government in February 2010) 4% of the divisible fund of the State Government is to be devolved to PRIs and 1% to Urban Local Bodies (ULBs). Funds given to PRIs have been less than the amount to be devolved in almost every year since 2017-18. The difference between the actual devolution and the fund to be devolved was the highest in 2020-21 and 2021-22, due to financial constraints during the COVID-19 pandemic (see Figure 4). |
Figure 4: Funds released as a % of Fund to be devolved (in crore)
Source: State Finances Audit Report for Madhya Pradesh, CAG, 2023.
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Annexure 1: Comparison of states’ expenditure on key sectors
The graphs below compare Madhya 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 Madhya Pradesh) as per their budget estimates of 2023-24.[1]
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Education: Madhya Pradesh has allocated 14.9% of its expenditure on education in 2024-25. This is similar to the average allocation for education by states in 2023-24 (14.7%).
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Health: Madhya Pradesh has allocated 6.7% of its total expenditure towards health, which is marginally higher than the average allocation for health by states (6.2%).
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Roads and Bridges: Madhya Pradesh has allocated 2.8% of its expenditure on roads and bridges. This is lower than the average allocation by states (4.6%).
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Urban development: Madhya Pradesh has allocated 2.7% of its expenditure towards urban development. This is lower than the average allocation towards urban development by states (3.4%).
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Agriculture: Madhya Pradesh has allocated 6.9% of its total expenditure towards agriculture, which is higher than the average expenditure on agriculture by states (5.9%).
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Energy: Madhya Pradesh has allocated 7.7% of its total expenditure towards energy, which is 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 Madhya Pradesh.
Sources: Annual Financial Statement, Madhya Pradesh Budget 2024-25; various state budget; 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) |
1,95,204 |
2,05,491 |
5% |
|
1. Revenue Receipts (a+b+c+d) |
1,95,180 |
2,03,986 |
5% |
|
a. Own Tax Revenue |
72,860 |
72,611 |
-0.3% |
|
b. Own Non-Tax Revenue |
13,618 |
19,878 |
46% |
|
c. Share in central taxes |
64,107 |
74,543 |
16% |
|
d. Grants-in-aid from the Centre |
44,595 |
36,954 |
-17% |
|
Of which GST compensation grants |
5,000 |
4,572 |
-9% |
|
2. Non-Debt Capital Receipts |
24 |
1,505 |
6064% |
|
3. Borrowings |
75,943 |
58,867 |
-22% |
|
Of which GST compensation loan |
0 |
0 |
-100% |
|
Net Expenditure (4+5+6) |
2,47,715 |
2,46,694 |
-0.4% |
|
4. Revenue Expenditure |
1,98,916 |
1,99,895 |
0.5% |
|
5. Capital Outlay |
45,686 |
44,438 |
-3% |
|
6. Loans and Advances |
3,114 |
2,360 |
-24% |
|
7. Debt Repayment |
24,114 |
22,006 |
-9% |
|
Revenue Balance |
3,736 |
4,091 |
9% |
|
Revenue Balance (as % of GSDP) |
0.32% |
0.31% |
|
|
Fiscal Deficit |
52,511 |
41,203 |
-22% |
|
Fiscal Deficit (as % of GSDP) |
4.6% |
3.1% |
|
Source: Madhya 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 |
|
Land Revenue |
1,241 |
956 |
-23% |
|
State GST |
25,000 |
23,397 |
-6% |
|
State Excise |
13,255 |
12,955 |
-2% |
|
Taxes and Duties on Electricity |
3,364 |
3,498 |
4% |
|
Sales Tax/ VAT |
16,968 |
17,719 |
4% |
|
Stamps Duty and Registration Fees |
8,200 |
8,812 |
7% |
|
Taxes on Vehicles |
3,700 |
4,028 |
9% |
Source: Madhya 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 |
|
Rural Development |
14,313 |
10,806 |
-25% |
|
Agriculture and Allied Activities |
16,784 |
14,524 |
-13% |
|
Education, Sports, Arts, and Culture |
39,326 |
34,814 |
-11% |
|
Police |
8,813 |
7,814 |
-11% |
|
Water Supply and Sanitation |
8,657 |
7,942 |
-8% |
|
Welfare of SC, ST, OBC, and Minorities |
6,704 |
6,258 |
-7% |
|
Social Welfare and Nutrition |
11,730 |
11,802 |
1% |
|
Health and Family Welfare |
13,903 |
14,022 |
1% |
|
Housing |
10,691 |
10,846 |
1% |
|
Transport |
7,299 |
9,352 |
28% |
|
of which Roads and Bridges |
7,133 |
9,120 |
28% |
|
Energy |
21,816 |
28,355 |
30% |
|
Urban Development |
5,776 |
7,858 |
36% |
|
Irrigation and Flood Control |
8,438 |
13,991 |
66% |
Source: Madhya Pradesh Budget Documents of various years; PRS.
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