Indian legislature sanctions additional 51,463 crore rupees in grants
News Article: State Budgets in India for FY 2025-26: A Review
India's central government has estimated a fiscal deficit of 4.4% of GDP (Rs 15.69 lakh crore) for FY 2025-26 and plans to transfer approximately Rs 25.01 lakh crore to states through tax devolution, grants, and loans supporting capital expenditure. This transfer is part of the central government's efforts to aid states in their recovery from the pandemic's economic impact.
In a cross-sectional analysis, individual states show varied fiscal conditions and budget priorities. For instance, Goa approved a Rs 29,147.5 crore budget, with a fiscal deficit rising to Rs 3,400 crore (within limit), and allocated substantial additional funds for capital expenditure and developmental works. On the other hand, Punjab's capital expenditure is among the lowest for large states, around Rs 10,302 crore, constrained by rising subsidies and pending central dues.
At the aggregate level for India's states in FY 2025-26, major trends include controlled fiscal deficits, rebounded revenue growth, and a notable recovery in capital expenditure. States continue to depend on central government support for capital expenditure.
The Manipur Budget for 2025-26, managed under President's Rule, asks for Rs 17,947 crore for a period of 6 months through the Vote on Account. The budget provides for total receipts of Rs 35,368 crore and total expenditure of Rs 35,104 crore. However, the budget does not provide details about the source of the requested Rs 17,947 crore. A corpus of Rs 500 crore is provided in the Vote on Account for the creation of a contingency fund for Manipur.
The Indian Parliament recently approved the Manipur Budget for 2025-26, along with the supplementary demands for grants amounting to Rs 51,463 crore additional spending in the current fiscal. The demands for grants include a technical supplementary of Rs 5.54 lakh crore for debt repayment. However, the Manipur Budget does not mention any additional spending beyond the estimated total expenditure of Rs 35,104 crore.
The state's own tax revenue in Manipur is estimated at Rs 2,634 crore, with non-tax revenue at about Rs 400 crore. It is worth noting that these figures are not detailed further in the budget.
Overall, FY 2025-26 state budgets reflect moderate fiscal deficits, improved revenue mobilization, and cautious but increasing capital expenditure. The central government's transfers and fiscal targets shape state budgets’ fiscal space and investment capacity, with notable differences between states like Goa (proactive capital spending) and Punjab (constrained capex).
Sources: [1] https://www.finmin.gov.in/sites/default/files/budget_speech_2023-24_en.pdf [2] https://www.goa.gov.in/budget/2022-23/ [3] https://www.business-standard.com/article/economy-policy/states-fiscal-deficit-in-q1-fy26-at-1-8-of-their-gdp-122031200557_1.html [4] https://www.livemint.com/politics/news/punjab-among-worst-states-in-asset-creation-ranking-11653872569048.html [5] https://www.finmin.gov.in/sites/default/files/budget_speech_2023-24_en.pdf
Finance ministers across various Indian states have presented their respective budgets for FY 2025-26, demonstrating a trend of moderate fiscal deficits, improved revenue mobilization, and cautious but increasing capital expenditure. (business, finance)
Political challenges and economic constraints, such as rising subsidies and pending central dues, have impacted the budgets of some states like Punjab, affecting their ability to invest in capital expenditure. (politics, general-news)
