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Informist, Thursday, Feb. 20, 2025

 

By Krity Ambey

 

NEW DELHI – Tamil Nadu, Meghalaya and Himachal Pradesh have announced the dates for presenting their state Budget for 2025-26 (Apr-Mar), taking the total number of states presenting their Budget in March to eight so far.

Meghalaya will present the state Budget on Mar. 5, followed by Tamil Nadu on Mar. 14 and Himachal Pradesh on Mar. 17.

 

Assam, Bihar, Jharkhand, Karnataka, and Maharashtra have already announced they will present their Budget in March. Bihar and Jharkhand will present the Budget on Mar. 3, followed by Karnataka on Mar. 7, and Assam and Maharashtra on Mar. 10.

 

Six states, including Kerala, West Bengal, Odisha, Rajasthan, Gujarat, and Uttar Pradesh, have already presented their Budget for FY26. Andhra Pradesh will present its Budget on Feb. 28. 

 

Himachal Pradesh's Budget will be the most keenly awaited with the state reeling under a financial crisis. The state ministers have foregone their salaries and allowances for two months due to the crisis and state Chief Minister Sukhvinder Singh Sukhu has also urged all the state assembly members to give their salaries and allowances.

 

The financial crisis in Himachal Pradesh is mainly on account of the rising debt burden due to huge salary and pension bills, lower central aid, and inadequate revenue generation. The state's debt to Gross State Domestic Product ratio for the current fiscal year is projected at 42.5%, against the revised estimate of 42.3% in FY24. 

 

The Congress government in the state, which came to power in 2023, had reverted to the Old Pension Scheme. According to a paper by the Reserve Bank of India, the shift to the Old Pension Scheme can increase the government's pension spending by over 4.5 times the outgo under the New Pension System.

 

Himachal Pradesh's pension expenditure is projected at 17% of the state's total expenditure of INR 584.44 billion in FY25. In FY24, the state had spent 14.7% of its total expenditure on pensions. The state's fiscal deficit is projected to rise to 4.75% of GSDP in FY25 from 4.61% of GSDP in FY24. This is beyond the Centre's directive to states to maintain a fiscal deficit of below 3.5% of GSDP. 

 

Meghalaya's Chief Minister Conrad K. Sangma, who also holds the finance portfolio, will present the state's FY26 Budget on Mar. 5. The northeastern state's fiscal deficit for the current fiscal year is projected at INR 20.29 billion, which translates to 3.8% of GSDP. The state has projected total spending of INR 270.72 billion in FY25, including capital expenditure of INR 58.70 billion. 

 

For the current fiscal year, Tamil Nadu's fiscal deficit is projected at 3.44% of GSDP, assuming a nominal GSDP growth of 15.9%. The state has projected a revenue expenditure of INR 3.48 trillion for FY25, which includes financial assistance of INR 144.42 billion to Tamil Nadu Generation and Distribution Corp Ltd. Its capital expenditure is projected at INR 476.81 billion this year.

 

Eleven states are yet to announce the date of the presentation of their FY26 Budget. End

 

Edited by Saji George Titus

 

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