State Budgets 2021-22 | A close look at Budgets of 12 major states and their key highlights

Bengaluru ranked first on government’s Ease of Living (EOL) Index 2020. The center of India’s high-tech industry, the city emerged as the top performer on ease of living parameters among the cities with population more than a million. The EOL Index, prepared by the ministry of housing and urban affairs, evaluates the well-being of citizens in 111 cities, which comprises cities identified under the Smart Cities Mission. The EOL Index 2020 report evaluates development outcomes across four pillars – quality of life, economic ability, sustainability, and citizens’ perception survey – covering 49 indicators examined under 14 categories. (Image: Shutterstock)

Bengaluru ranked first on government’s Ease of Living (EOL) Index 2020. The center of India’s high-tech industry, the city emerged as the top performer on ease of living parameters among the cities with population more than a million. The EOL Index, prepared by the ministry of housing and urban affairs, evaluates the well-being of citizens in 111 cities, which comprises cities identified under the Smart Cities Mission. The EOL Index 2020 report evaluates development outcomes across four pillars – quality of life, economic ability, sustainability, and citizens’ perception survey – covering 49 indicators examined under 14 categories. (Image: Shutterstock)

Since the presentation of the Union Budget on February 1, almost all the states have presented their budgets for 2021-22, including the poll-bound states of West Bengal, Kerala, Tamil Nadu and others.

Moneycontrol brings you a primer of 12 major state budgets and their salient announcements.

(Dates in bracket denote the day of budget presentation)

Job tops priority in Thomas Isaac’s Budget (January 15)

Kerala Finance Minister Thomas Isaac is seen as a symbol of democratic federalism at the national level due to his bold stands at the GST Council. As expected from a poll-bound state, Isaac’s budget for 2021-22, presented on January 15, was nothing short of populist, as he promised 800,000 jobs in the coming fiscal year, raising welfare pensions and proposing a pay hike for state government employees and pensioners.

The majority of the welfare pensions in the state were raised by Rs 100 to Rs 1,600, while new salaries for the state government employees will be applicable with effect from April 1. For the upcoming financial year, the state has pegged its revenue receipts at Rs 1.29 lakh crore as compared to a revenue expenditure of Rs 1.45 lakh crore. This means the state will be having a revenue deficit of Rs 16,910 crore during the year. Isaac also projected a capital expenditure of Rs 12,546 crore for the fiscal. 

While not short of populist measures, what worries the state government may be its rising debt levels. The total debt outstanding of the state is expected to 37.39 percent of the gross state domestic product (GSDP) in 2021-22, as compared to 29.82 percent in 2019-20.

Making Atmanirbhar Uttar Pradesh (February 22)

With the state set to go for polls in 2022, the last full-fledged budget by the Yogi Adityanath-led government was focused on improving the basic amenities in the state by targeting to bring electricity, roads and clean water to every home. The Budget that claims to make India’s most populous state ‘atmanirbhar’ (self-reliant) also played the religious cards by christening the upcoming airport in Ayodhya as Maryada Purshottam Shri Ram Airport and also announcing a special package for the religious city’s development. 

In terms of outlay, 2021-22 saw the largest outlay in the history of the state at Rs 5.5 lakh crore. Giving a huge thrust on infrastructure development, the allocation to new schemes saw a spike of 151 percent from Rs 10,967 crore in 2020-21 to Rs 27,598 crore.

In a relief for around 40 lakh migrant workers who returned back to the state due to the COVID-19 pandemic, the state announced a new scheme called to help them in getting employed or opting for self-employment. However, a major criticism by the Opposition parties was that the state Budget ignored the agriculture sector, which is its economy driver, and also failed in lining up plans to achieve its promised 23 crore jobs.

Mamata lines up sops ahead of polls (February 5)

After the Union Budget’s focus on poll-bound West Bengal, West Bengal Chief Minister Mamata Banerjee too matched her Budget with sops through welfare schemes, free rations and subsidised healthcare in the 2021-22 Budget. By becoming the first woman to present the state’s Budget, she came out with an annual budget of Rs 3 lakh crore, up 17 percent from 2020-21.

With a focus on rural Bengal, Banerjee allocated Rs 23,983 crore towards panchayat and rural development. As per the Budget, the state’s GSDP has increased 2.7 times and revenue too was up 2.9 times. The Budget lined up construction of 10,000 km of rural roads in the coming fiscal. An effort was given to claim the legacy of Netaji Subhash Bose, by announcing projects in his name.

Mamata played language and religious cards too by announcing ‘Alchiki’-medium (a tribal language) schools, English medium schools for scheduled castes and tribes, converting several madrasas into government-aided ones and also wooing the public in tea garden areas. The state’s revenue receipt for the fiscal was seen at Rs 1.94 lakh crore, compared to a revenue expenditure of Rs 2.06 lakh crore.

Delhi Budget provides push to education, health (March 8)

Giving a major thrust to its pet theme – education – the AAP government announced an outlay of Rs 16,377 crore for the education sector. Education this time will comprise one-fourth of the Rs 69,000-crore budget.

Delhi government’s Deputy Chief Minister Manish Sisodia, who is in charge of the Finance and Education portfolios, on March 9 presented the state’s first e budget for 2021-22 in the Delhi Legislative Assembly. The state government also said that it will set up virtual model schools in order to benefit the students who wish to get educated under Delhi’s education model. The government will also open its first Sainik School in Delhi and a deshbhakti curriculum will be started in Delhi schools.

Other key announcements included setting up to 100 mohalla clinics dedicated to women. Further, Sisodia said the COVID-19 vaccination will be free of cost for the Delhi residents in all the government hospitals. The AAP government has allocated a sum of Rs 50 crore for the vaccination drive.

The Delhi government has earmarked a sum of Rs 9,934 crore for the health sector and Rs 5,328 crore for urban development. The government also proposes to bring in  1,300 e-buses in Delhi and set up a vehicle charging station every three kilometres in the city. Sisodia allocated a sum of Rs 45 crore to install 500 flags around the national capital.

 Maharashtra: Infra, agriculture and health in focus (March 8)

The Maharashtra state budget 2021-22 put an enhanced focus and commitment towards infrastructure development.  Maharashtra Deputy Chief Minister Ajit Pawar, who also holds the finance portfolio on March 8 presented the state budget for the year 2021-22 in the state assembly.

Pawar presented a Rs 4.84 lakh crore Budget. Apart from infrastructure spending, the budget also focused on the health and agriculture sector, the former especially as the state is witnessing a second COVID-19 wave. A provision of Rs 58,748 crore was made for infrastructure development and Rs 8,420 crore was allocated for urban development. The state government also allocated Rs 2,369 crore, giving a push for tourism.

Some of the major infra announcements included Pune-Nashik railway project, with a proposed length of 235 km and estimated at a cost of Rs. 16,039 crore, and a 170-km Pune Ring Road with an estimated cost of Rs 26,000 crore among others.

The Maharashtra government also proposed a Rs 7,500 crore project involving construction and upgrade of health institutions across the State to be completed in four years.  An allocation of Rs 2,961 crore was made for public health while Rs 800 crore was allotted for upgrading district and primary health centres.

Punjab budget goes big on agriculture, loan waivers (March 8)

Punjab Finance Minister Manpreet Singh Badal on March 8 presented the Budget for the financial year 2021-22 with an outlay of Rs 1.68 lakh crore in the state assembly. The Punjab government promised to waive Rs 1,186 crore of 1.13 lakh farmers and Rs 526 crore of landless farmers under the crop loan waiver scheme in 2021-22 on the back of raging protests in the state over the Centre’s controversial farm laws.

The government also announced a new programme called the Kamyab Kisan Khushaal Punjab, with an outlay of Rs 3,780 crore to be implemented during the next three years.

Giving a big push to education, the government allocated a sum of Rs. 11,861 crore towards the education space and a sum of Rs 3,744 crore was allotted for the creation of rural infrastructure. For urban infrastructure, the Punjab government dedicated a sum of Rs 7,192 crore for 2021-22.

The government also proposed to increase the old-age pension from Rs 750 per month to Rs 1,500 per month.

 Other key announcements included allocation of Rs 2,449 crore for roads and bridges and an allocation of Rs 1,372 crore for the various social schemes aimed at social justice and empowerment.

Rajasthan announces Universal healthcare coverage (February 24)

Rajasthan Chief Minister Ashok Gehlot on February 24 presented the state’s first paperless budget, the highlight of which was the announcement of a universal health care scheme worth Rs 3,500 crore for the people of the state. The plan to provide each family in the state with medical insurance coverage of up to Rs 5 lakh was part of the state’s Congress government’s promise of increasing expenditure on health. However, despite the government continuing to announce new schemes for health, as well as for women and labour, revised expenditures for 2020-21 showed the state spent less than the budgeted expenditure.

The state’s opposition BJP unit has criticized the budget for doing too little for the farm sector under economic strain and effectively reducing the outlay for state farm cooperatives. Instead, trying to temper expectations from farmers, Rajasthan has announced that a separate farm budget will be presented from next year onwards. It also announced 5 lakh new jobs for the youth but the BJP pointed out that job growth estimates from the preceding years have not been fulfilled.

The state government also resisted the urge to raise taxes after a difficult financial year marred by the pandemic which saw the state get Rs 24,000 crore less revenue than earlier estimated. With a fiscal deficit of Rs. 47,652 crore or 4 percent of the Gross State Domestic Domestic Product, the budget announced more borrowings from the market will follow.

Tamil Nadu grapples with fiscal challenges (February 23)

Staring at the dual challenges of a steep fall in tax collections as well as upcoming state elections, the O Paneerselvam government chose to raise allocations and increase borrowing as much as the state’s legislations allow.

With the state’s key manufacturing industries such as automobiles and textiles closed for months under a series of national and regional lockdowns, Tamil Nadu’s tax collections fell by 18 percent. As a result, the fiscal deficit is now pegged at 5 percent of the state’s economy. It has now crossed 3 percent for the second time in the past five years. With fiscal prudency considered a serious issue in the state, Deputy Chief Minister O Panneerselvam assured voters that the Tamil Nadu Fiscal Responsibility Act, 2003 has already been amended.

But with elections knocking, the AIADMK government increased allocations for almost all sectors. With the state already overshooting its budgeted allocation for health expenditure by 17 percent in 2020-21, allocations for health saw a major rise to tide over further expenditure that the state expects in the coming months. More allocations were made for Amma mini-clinics opened last December to serve as grassroot medical centres.

Revenue-surplus Bihar ramps up social sector spend (February 22)

With the state remaining revenue surplus in tumultuous FY21, an election behind him, and a low comparative coronavirus toll, the Nitish Kumar-led government in Bihar turned on the taps to finance its social development agenda in the Budget for 2021-22.

In contrast to major states struggling to raise funds in the wake of the coronavirus pandemic, Bihar has seen a revenue surplus of Rs 9195 crore. The state government has subsequently raised publicity on the issue, announcing the surplus would go towards building crucial physical infrastructure. With major floods in the northern part of the state in the previous two years, Rs 15,227.74 crore has been allocated for roads while Rs 8,560 crore have been earmarked for energy.

But the biggest allocations have been made for the education sector (Rs 38,036 crore) and rural development (Rs 16,835 crore). Multiple schemes for women have also been announced such as a Rs 25,000 one-time disbursal to unmarried women who pass intermediate exams, and Rs 50,000 for unmarried women once they complete their bachelor’s degree.

The good finances have allowed the government to not raise taxes and focus on its renewed ‘Saat Nischay’ programme, running since 2015. Better connectivity and health infrastructure, promotion of entrepreneurship, skill development and improved irrigation facilities are part of the programme.

 Madhya Pradesh goes ‘vocal for local’ (March 2)

Taking a page out of the Centre’s agenda, as well as that of the recent UP Budget, Madhya Pradesh Finance Minister Jagdish Devda presented the 2021-22 budget with a focus on ‘Aatmanirbharta’. Devda presented a budget of Rs 2.41 lakh crore for 2021-22 with no additional tax burden.

Even then, the overall revenue increase in the next fiscal is estimated at 33 percent year-on-year. Out of the total budget size, Rs 44,152 crore has been allocated for capital expenditure while Rs 1.12 lakh crore is the planned outlay for social sector schemes.

Most of the allocation was for the Central Government’s schemes.

Rs 5,762 crore was allocated for providing tap water to households under the Jal Jeevan Mission. A provision of Rs 9,793 crore was been made for the establishment of primary schools. Funds have also been allocated for constructing 2,441 km of roads and 105 railway over-bridges. An amount of Rs 3,200 crore was allocated under the CM’s Farmers’ Welfare Scheme under which Rs 4,000 are paid to each eligible farmer annually.

A provision of Rs 4,592 crore was made under the Atal Krishi Jyoti Yojana and Rs 900 crore for the development of smart cities.

Gujarat: Surplus Budget but debt overhang bites (March 3)

A revenue surplus budget for 2021-22, without new taxes or tinkering with existing rates, but a massive GST shortfall in 2020-21 due to COVID-19 pandemic, and ever-increasing state debt. That in essence was the budget presented by Finance Minister and Deputy Chief Minister Nitin Patel.

Patel projected a revenue surplus of Rs 588 crore for the coming fiscal. However, the GST shortfall for the current fiscal is estimated at Rs 9,000 crore after accounting for the compensation received from the Centre. The state’s public debt at the end of next fiscal is estimated to be around Rs 3.8 lakh crore.

Among the major outlays, the budget provides Rs 32,719 crore for education, Rs 11,323 crore for health and family welfare, Rs 13,493 crore for urban development, Rs 13,034 crore for energy and petrochemicals department and Rs 6,599 crore for the industries department.

Karnataka: Focus on religion, technology and COVID-19 (March 8)

Like most states, Karnataka Chief Minister BS Yediyurappa steered clear of tinkering with tax rates or increasing the levy on petrol and diesel. A slew of safety measures for women was announced and Rs 5,372 is earmarked for COVID-19.

Rs 31,028 crore has been allocated to agriculture and allied sectors with Rs 5,600 crore set aside for irrigation works. The chief minister said that all Karnataka districts will have a ‘gaushala’ to prevent ‘slaughter of cows and to conserve livestock’. Rs 1,500 crore has been allocated for minority communities and a new board for the development of Vokkaligas has been proposed.

As is the norm, a lion’s share of the urban development budget went to the capital city, with a total of Rs 7,795 crore allocated for the development of Bengaluru. In a first in India, Yediyurappa said that maps containing details of forest types and density will be prepared in Karnataka using satellites with precision of up to 50 centimetres and a property registration pilot project using blockchain will be implemented at a cost of Rs 1 crore, with the help of IIT-Kanpur to prevent cheating and document tampering.