Budget Talk
Four states line up to present Budgets for FY26 next week, 2 more set dates
This story was originally published at 22:03 IST on 13 February 2025
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By Krity Ambey
NEW DELHI – A fortnight after the Union Budget for the financial year 2025-26 (Apr-Mar) was presented in Parliament, four states--Odisha, Rajasthan, Gujarat, and Uttar Pradesh--are set to present their Budgets for FY26 next week. Andhra Pradesh, Bihar, Maharashtra, Jharkhand, Mizoram, Assam, and Karnataka have lined up their Budgets for presentation in the following weeks. So far, Kerala and West Bengal have unveiled their Budgets for the next fiscal.
Of the states mentioned, Uttar Pradesh, Bihar, and Andhra Pradesh recently anounced their Budget dates. Informist had on Feb 6 reported briefly on the finances of the rest of the states that had earlier announced their Budget timelines.
Uttar Pradesh will present its Budget for FY26 on Feb. 20. At INR 865.31 billion, the state had cut its fiscal deficit for FY25 to 3.46% of state GDP, from 3.49% of the state GDP in the revised estimate for FY24. Uttar Pradesh Finance Minister Suresh Khanna has also projected a revenue surplus of INR 741.47 billion for FY25, which translates to 2.97% of the state GDP. The state is likely to invest INR 1.55 trillion in capital expenditure this year, which is 21% of its total spending.
The Bihar government, which has a history of projecting an ambitious fiscal consolidation plan and then faltering on it, will announce its Budget on Mar. 3. Bihar's Finance Minister Samrat Chaudhary has set the fical defcit aim for this year at 3.0% of the state GDP, against the revised estimate of 8.9% of state GDP in FY24. The Budget estimate for the fiscal deficit in FY24 was also 2.98% of state GDP, compared to the preceding year's deficit of 6% of state GDP.
Chaudhary has indicated a capital expenditure of INR 530.49 billion for FY26, out of the total expenditure of INR 2.79 trillion. But Bihar also has a history of underestimating its expenditures, which contributes to expansion of its fiscal deficit. For FY24, Bihar had initially estimated its total expenditure at INR 2.62 trillion, which was raised to INR 3.15 trillion in the revised estimate.
Bihar's FY24 revised fiscal deficit was way above the limit set by the Centre. The Union government, in FY24, had set the limit for the fiscal deficit of states at 3.5% of state GDP.
The eastern state, which is scheduled to hold elections to its legislative assembly later this year, has also received a special focus in announcements under the Union Budget for FY26, setting up a makhana board, greenfield airports, and the National Institute of Food Technology, Entrepreneurship, and Management. Bihar has a coalition government led by the Janata Dal (United), which is a partner in the Bharatiya Janata Party-led National Democratic Alliance government at the Centre.
Like Bihar, Andhra Pradesh's fiscal deficit aim for FY25, at 4.2% of state GDP, is higher than the Centre's mandate. Finance Minister Payyavula Keshav will present the Budget for FY26 in the legislative assembly on Feb. 28.
The Telugu Desam Party, which runs the government in Andhra Pradesh, is also a member of the NDA at the Centre. The southern state had received a generous allocation in the Union Budget for FY25, with the central government announcing an allocation of INR 150 billion for infrastructure projects.
It would be interesting to see how the two crucial coalition partners of the BJP plan their finances for FY26, when the Centre has demostrated exemplary fiscal prudence and bettered its fiscal deficit for the current year to 4.8% of GDP from 4.9% of GDP estimated earlier. The Union Budget for FY26 has projected a fiscal deficit of 4.4% of GDP. End
Edited by Rajeev Pai
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