Rajasthan Chief Minister Ashok Gehlot presented his ninth budget in the State Legislative Assembly on Feb. 23. Clocking at nearly three hours, his speech included several announcements to boost job creation, expand the coverage of state health programmes, and support farmers. This is the penultimate budget of his government's term before the 2023 elections.
Job Creation
In his budget speech, the chief minister announced the creation of the Indira Gandhi Urban Employment Scheme. For this, the government has provisioned Rs 200 crore in the next financial year.
In another step towards job creation, the number of workdays under the Mahatma Gandhi National Employment Guarantee Scheme has also been increased. MGNREGS guarantees 100 days of employment to every rural household in a year. States can increase the number of man-days of work over and above the 100 days. Rajasthan announced that it would bring the number of workdays to 125. MGNREGS has been allocated Rs 3,937 crore for 2022-23.
More Investment In Health
Health being a state subject, states share the responsibility with the Centre for investments in public health. Based on last year's budget estimate, Rajasthan allocates a higher percentage of its budget towards health (7%) compared to the average allocation of all states (5.5%).
The government rolled out the Chiranjeevi Swasthya Bima Yojana in May 2021 to provide health insurance coverage of up to Rs 5 lakh to every family in the state each year. The insurance cover has been expanded to Rs 10 lakh for the next financial year. The scheme has been allocated Rs 2,228 crore in 2022-23.
Rajasthan's allocation to health is 7.4% of the total expenditure on all sectors in 2022-23. This is closer to the 15th Finance Commission target of more than 8% by 2022.
Separate Budget For Agriculture
In a separate budget for agriculture, the government announced the expansion of the state income support program for farmers from Rs 2,000 to Rs 5,000 crore. Interest-free crop loans amounting to Rs. 20,000 crore have also been announced.
Allocation For Energy
Rajasthan allocates a significant portion of its budget towards energy, twice as much as the average state spending across India, based on the budget estimates for 2021-22. The higher allocation has continued for 2022-23 at Rs 26,750 crore. Of this, Rs 21,020 crore has been set aside towards power tariff subsidy.
To reduce AT&C (Aggregate Technical and Commercial) losses, prepaid smart meters will be installed in 48 lakh households at a cost of Rs. 3,565 crore under the central Revamped Distribution Sector Scheme. In 2019-20, Rajasthan recorded an AT&C loss of 30% against the UDAY target of 15%. Some of the reasons for high AT&C losses indicate issues such as theft and pilferage of power, lack of metering and poor billing and collection system.
Capital Outlay
In 2022-23, Rajasthan's capital outlay for asset creation is estimated at Rs 34,809 crore, which is 13% of the estimated net expenditure. In 2021-22, the capital outlay for the health sector increased from Rs 632 crore at the budget estimates stage to Rs 1,804 crore at the revised estimates stage.
For 2022-23, the highest capital outlay is for water supply and sanitation (Rs 6,724 crore), followed by irrigation (Rs 5,965 crore), and roads and bridges (Rs 5,505 crore).
Loss Of Revenue In 2022
The discontinuation of GST compensation from the Centre after June 2022 could dent the state finances in the next fiscal year. Rajasthan relied on GST compensation from the Centre for 35% of its revenue in 2020-21. While this is better than the average of all states (36%), Rajasthan has three months left to identify revenue streams to bridge the revenue shortfall.
This is the first in a series of articles authored by PRS Legislative Research, bringing attention to the priorities laid down by states in their budgets. You can read the full article on the Rajasthan state budget on the PRS Legislative Research website.
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