32. State Budget and Fiscal Management — Full Notes

CORE Key Points at a Glance

1. 1

   Rajasthan Budget 2025-26 Total Outlay

   • Modified Schematic Budget: ₹2,09,633.99 crore
   • Largest budget in the state's history
   • Presented by Deputy CM Diya Kumari on 19 February 2025
2. 2

   Revenue Receipts and Own Tax Revenue (2023-24)

   • Total Revenue Receipts: ₹2,03,276 crore
   • Own Tax Revenue: ₹94,086 crore
   • SGST grew 12.50%; Stamps & Registration grew 12.12%
3. 3

   Fiscal Deficit vs FRBM Target (2023-24)

   • Fiscal Deficit: ₹65,580 crore = 4.31% of GSDP
   • FRBM target: 3% of GSDP — Rajasthan is above target
   • Persistent breach driven by committed expenditure pressure
4. 4

   Revenue Deficit (2023-24)

   • Revenue Deficit: ₹38,955 crore
   • Indicates committed expenditure pressure on revenue account
   • Government is borrowing to fund current (non-asset) expenditure
5. 5

   Total Fiscal Liabilities — Debt Sustainability Concern

   • Total Fiscal Liabilities (2023-24): ₹5,71,639 crore
   • Equals 37.57% of GSDP — above FRBM ceiling of 35%
   • Rising debt-GSDP ratio is Rajasthan's primary medium-term fiscal risk
6. 6

   Capital Outlay — Investment Push (2023-24)

   • Capital Outlay: ₹26,646 crore
   • 34.6% increase over the previous year
   • Signals infrastructure investment priority of current government
7. 7

   Committed Expenditure — The Fiscal Space Problem

   • Salaries + pensions + interest payments ≈ 60% of revenue expenditure
   • Leaves very limited discretionary fiscal space
   • Old Pension Scheme (OPS) reversion is the single largest medium-term fiscal risk
8. 8

   Revenue Expenditure Sector Breakdown (2023-24)

   • Social Services: 42.06% (Education, Health, Welfare)
   • General Services: 32.07% (Salaries, Pensions, Interest)
   • Economic Services: 25.87% (Agriculture, Industry, Infrastructure)
9. 9

   Revenue Receipts Coverage of Expenditure

   • 75.49% of total expenditure in 2023-24 was met from revenue receipts
   • Remaining 24.51% required borrowings
   • Ratio below 100% = persistent structural revenue deficit
10. 10

    Rajasthan FRBM Act 2005 — Statutory Fiscal Framework

    • Rajasthan Fiscal Responsibility and Budget Management Act, 2005 (राजस्थान राजकोषीय उत्तरदायित्व और बजट प्रबंधन अधिनियम, 2005)
    • Mandates fiscal deficit target of 3% of GSDP and debt ceiling of 35%
    • Requires Medium-Term Fiscal Policy Statement along with every budget
11. 11

    6th State Finance Commission — Devolution to Local Bodies

    • 6th SFC recommendations determine devolution to Panchayati Raj Institutions and Urban Local Bodies
    • Covers period 2020-21 to 2024-25 under Articles 243-I and 243-Y
    • Fund ratio: GP:PS:ZP = 75:20:5; ₹621.07 crore transferred in 2024-25
12. 12

    World Bank SPFM Project — Fiscal Reform Support

    • SPFM (Strengthening Public Financial Management): US$31 million
    • Supports fiscal reforms in Rajasthan: treasury management, tax administration, procurement
    • Specifically targets Medium-Term Expenditure Framework and Treasury Single Account
13. 13

    Developmental Expenditure Share (2023-24)

    • Developmental expenditure: ₹1,91,190 crore = 71% of total expenditure
    • Remaining 29% covers general administration, interest payments
    • High developmental share reflects social and infrastructure spending priorities
14. 14

    Own Tax Revenue — Key Heads and Non-Tax Sources

    • Own Tax Revenue dominated by: SGST (state share), Stamps & Registration, Excise, Vehicle Tax
    • Non-tax revenue includes: mining royalties (limestone, zinc, Barmer crude oil)
    • IGNP water charges also a non-tax revenue source, though historically under-collected