Rajasthan Budget 2023-24: Announcements Useful and Aplenty, Will There be Effective Implementation?

The last Budget of the current regime of the Rajasthan government, as expected, is full of announcements for everyone. The state Budget has been in limelight for months and by putting up hoardings with the words “Saving, Relief, Growth”, the state government had raised people’s expectations. This year, the government went for wider consultations and invited online suggestions from people on what it should include in the Budget. The state government also published advertisements in the newspapers asking people to submit their suggestions online. And in the words of the chief minister during the Budget speech, “the state Budget 2023-24 is an attempt to include the sentiments of the common people, after examining the thousands of Budget-related suggestions.”

The state government has expanded the free electricity limit for farmers from 1,000 units to 2,000 units per month and for domestic users from 50 to 100 units per month. The Ujjwala beneficiaries are to get LPG cylinders for just Rs 500. Lots of announcements have been made for the youth and farmers – as they remained a key focus in the Budget. The students in the state will not have to pay any fee when they appear for the competitive exams for government jobs. The government announced a state fellowship for the NET/SLET research scholars, who are not getting any other fellowship, worth Rs 20,000 per month for three years. There was an announcement of a “new youth policy” under which a youth development and welfare fund of Rs 500 crores has been created.

The social security pension amount has been increased to Rs 1,000 and now it will increase automatically by 15% every year. The state already has a provision of 125 days of guaranteed employment in rural areas under MGNREGA and now this will extend to the urban areas as well under the previously announced urban employment guarantee scheme. In addition to free foodgrains, a food packet will be provided to every NFSA beneficiary every month which will include pulses, sugar, salt, edible oil, and spices.

The government has announced an entitlement-based social security backed by an act, which will include an income guarantee by providing 125 days of employment. There will also be the provision of social security pension of a minimum of Rs. 1,000 for the elderly, people with disability, and single women. A gig workers’ welfare act is to be introduced and a gig workers’ welfare board with Rs 200 crores will be formed in the state to provide social security to the gig workers. A support scheme for the street vendors in case of their hospitalisation has also been announced.

The state Budget saw a few announcements for the livestock farmers like an insurance scheme for two animals per family and compensation of Rs 40,000 to the farmers who lost their cows to the lumpy disease. Irrigation and drinking projects like Eastern Rajasthan Canal Project are to be provided Rs 1,300 crores and three new big projects for drinking water worth Rs. 11,000 crores have also been announced.

These announcements will obviously require an increased Budget for these sectors. The overall Budget size, however, has increased by 12.9% from the current year’s Budget estimates, while it will increase by just 2.25% from the current year’s revised estimate. The social sector Budget, which includes health, education, drinking water and sanitation, urban development, social welfare and nutrition, the welfare of SC/ST/OBCs, and rural development, has been increased by merely 7% from the current year’s allocations with a major increase in education, urban development, social welfare and nutrition, the welfare of SC/ST/OBCs Budgets. Though the size of the gender Budget has also not increased compared to the current year, the allocations under the Part A of the gender Budget – which has schemes with more than 70% of women beneficiaries – have increased substantially. However, the revenue expenditure for agriculture and allied sectors and the overall Budget for the rural development sector has been slashed.  The capital expenditure under the agriculture and allied sectors and overall irrigation budget, on the other hand, have seen an increase.

The revenue expenditure for the state is expected to increase by 8.56% and the capital outlay by 9.34% compared to the current year’s Budget estimates. The government hopes to have an 8.84% increase in revenue receipts with a substantial 19% increase in the tax revenue in the year 2023-24 compared to the current year’s Budget estimates. With this somewhat-controlled increase in expenses, the government is able to project a fiscal deficit of 3.98% of the state GDP. These estimates in the Budget are based on the assumption that the state will see 11.5% nominal growth in GSDP in the year 2023-24. While presenting the last Budget, the state government had assumed that the GSDP would grow by 11.56% on nominal prices in the year 2022-23, which turned out to be 16% as per the Economic Review 2022-23 of the state government. In the year 2022-23, the state GDP is projected to grow by 8.19% on constant prices, which is higher than the 7% growth projected in the national GDP.

This way, the state government has been able to make a number of Budget announcements for every section of society in the election year, while still keeping the fiscal deficit under the 4% limit. Even the last year’s state Budget had many good announcements and was praised a lot, but the status of the implementation of those announcements is not very clear. This year being the election year, the question is how the government is going to implement these announcements since the state government will have very little time to implement the Budget before the model code of conduct is in force in the state. Therefore, it is necessary for the government to move fast and take measures to implement the Budget announcements in the coming financial year. Also, it will be good if the state governments give detailed information on the status of the announcements made during the previous years’ Budgets.

Nesar Ahmad is the founder-director of Budget Analysis and Research Centre, Jaipur. The views are personal.