Haryana Budget Analysis 2023-2024 Part - 1 | HPSC Preparation: All subjects - HPSC (Haryana) PDF Download

On February 23, 2023, Mr. Manohar Lal Khattar, the Chief Minister of Haryana, unveiled the state's Budget for the financial year 2023-24. Here are the key highlights:

Budget Overview:

• The Gross State Domestic Product (GSDP) of Haryana for 2023-24, at current prices, is projected to reach approximately Rs 11.2 lakh crore, indicating a 13% growth over the previous fiscal year (2022-23).

Expenditure:

• The estimated expenditure (excluding debt repayment) for 2023-24 is Rs 1,48,730 crore, reflecting a 12% increase over the revised estimates of 2022-23. Additionally, the state plans to repay a debt of Rs 55,220 crore in the upcoming fiscal year.

Receipts:

• Receipts (excluding borrowings) for 2023-24 are expected to be Rs 1,15,455 crore, marking a 15% increase compared to the revised estimates of 2022-23 (Rs 99,745 crore). Notably, receipts in 2022-23 were 11% lower than the budget estimates (Rs 1,12,585 crore).

Deficits:

• The revenue deficit for 2023-24 is estimated to be 1.5% of GSDP (Rs 16,949 crore). In contrast, the revenue deficit for 2022-23 is anticipated to be 1.8% of GSDP, exceeding the budget estimate of 1% of GSDP. The fiscal deficit target for 2023-24 is set at 3% of GSDP (Rs 33,274 crore), whereas the fiscal deficit for 2022-23 is estimated to be 3.3%, surpassing the budgeted 3% of GSDP.

Policy Highlights:

• Deen Dayal Upadhyay Antyodyay Parivar Suraksha Yojana:
  This new scheme aims to provide financial assistance in case of death or disability to families with an annual income of up to Rs 1.80 lakh, as per the Parivar Pehchan Patra database.
• Agriculture:
  A scheme will be introduced to support farmers in adopting green manuring through dhaincha cultivation, with the government covering 80% of the total cost (Rs 720 per acre). Three new centers of excellence for horticultural crops will be established, and the Haryana Pashudhan Utthan Mission will be launched to boost entrepreneurship in animal husbandry.
• Renewable Energy:
  In 2023-24, a new scheme will be devised for the installation of grid-connected rooftop (GCRT) solar power plants in social and community institutions operated by both government and non-government organizations.
• Manufacturing:
  The state government will formulate a Toy Manufacturing Policy for electronic toys and a Medical Device Manufacturing Policy to encourage investments in medical devices.

Haryana's Economic Overview

• GSDP Growth:
  In the fiscal year 2022-23, Haryana anticipates a 7.1% expansion in its Gross State Domestic Product (GSDP) at constant prices, outpacing the national GDP growth rate, which is projected at 7%.
• Sectoral Contributions:
  Breaking down the economic composition for 2022-23 at current prices, agriculture, manufacturing, and services are expected to contribute 20%, 30%, and 51% respectively to the state's economy.
• Per Capita GSDP:
  For the fiscal year 2021-22, Haryana witnessed a 16% rise in its per capita GSDP, reaching Rs 3,04,422.
• Unemployment Statistics:
  As per the Periodic Labour Force Survey covering July 2021 to June 2022, Haryana faced an unemployment rate of 11.7% based on the current weekly status. This stands in contrast to the national unemployment rate of 6.6%.

Budget Estimates for 2023-24 Highlights

• In the fiscal year 2023-24, the total expenditure, excluding debt repayment, is set at Rs 1,48,730 crore, reflecting a 12% increase compared to the revised estimate of 2022-23. This expenditure will be funded through receipts (excluding borrowings) amounting to Rs 1,15,455 crore and net borrowings of Rs 26,620 crore. Total receipts, excluding borrowings, are anticipated to experience a 16% growth over the revised estimate of 2022-23.
• The revenue deficit for 2023-24 is projected to be 1.5% of the Gross State Domestic Product (GSDP), amounting to Rs 16,949 crore. This marks a reduction from the revised estimate of 1.8% of GSDP for 2022-23. The fiscal deficit target for 2023-24 is 3% of GSDP, totaling Rs 33,274 crore, which is lower than the revised estimate of 3.3% of GSDP for 2022-23. Notably, the central government has permitted states a fiscal deficit of 3.5% of GSDP for 2023-24, including a provision of 0.5% for implementing power sector reforms.
• In the revised estimates of 2022-23, the fiscal deficit as a percentage of GSDP stood at 3.3%, surpassing the budget estimate of 3%. However, it remained within the central government's permissible limit of 4% of GSDP for that year, with an additional 0.5% becoming available upon the undertaking of power sector reforms.

Table 1: Key Figures for Budget 2023-24 (in Rs crore)

Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Haryana Budget Documents 2023-24; PRS.

Expenditure Overview for 2023-24: State Public Sector Enterprises (SPSEs)

In the fiscal year 2020-21, a report by the Comptroller and Auditor General (CAG) highlighted that 11 State Public Sector Enterprises (SPSEs) experienced net losses. The losses escalated from Rs 37 crore in 2018-19 to Rs 426 crore in 2020-21, coinciding with the onset of the COVID-19 pandemic. Notably, 84% of these losses were attributed to Haryana Power Generation Corporation Limited and Haryana Vidyut Prasaran Nigam Limited.
For the upcoming fiscal year 2023-24, the proposed revenue expenditure is Rs 1,26,071 crore, reflecting a 10% increase from the revised estimate of 2022-23. This category encompasses spending on salaries, pensions, interest, grants, and subsidies.
Additionally, the capital outlay for 2023-24 is projected to be Rs 18,460 crore, indicating a substantial 26% rise from the revised estimate of 2022-23. Capital outlay represents expenses directed towards the creation of assets. It is noteworthy that in 2022-23, the capital outlay was 34% lower compared to the initial budget estimates, attributed to underspending in sectors such as urban development (77%), rural development (68%), and irrigation and flood control (29%).
In the forthcoming fiscal year, loans and advances provided by the state are anticipated to amount to Rs 4,198 crore, signifying a substantial 49% increase from the revised estimates of Rs 2,819 crore in 2022-23.

Table 2: Expenditure Budget for 2023-24 (in Rs crore)

The information is derived from the Annual Financial Statement and Haryana Budget for the fiscal year 2023-24, as well as PRS (PRS Legislative Research).
Committed Expenditure Overview: Committed expenditure for a state encompasses essential spending on items such as salaries, pensions, and interest payments. When a significant portion of the budget is allocated to committed expenditure, it limits the state's flexibility in determining other spending priorities, such as capital outlay. In the fiscal year 2023-24, Haryana is projected to allocate Rs 62,851 crore for committed expenditure, constituting 58% of its estimated revenue receipts. This allocation includes expenditure on salaries (26% of revenue receipts), interest payments (19%), and pensions (12%). Furthermore, it is anticipated that committed expenditure will witness a 6% increase over the revised estimate of 2022-23.

Table 3: Committed Expenditure for the Year 2023-24 (Amounts in Rs crore)

The information is extracted from the Budget in Brief and Annual Financial Statement of the Haryana Budget 2023-24, as well as PRS.
Expenditure by Sector: In the fiscal year 2023-24, 63% of the total sector-wise expenditure by the state is allocated to the following sectors. Annexure 1 provides a comparative analysis of Haryana's expenditure on key sectors in comparison to other states.

Table 4: Breakdown of sector-wise expenditure in the Haryana Budget for the fiscal year 2023-24 (in crore rupees).

Sources: Annual Financial Statement, Haryana Budget 2023-24; PRS.