Overall regional bias
Haryana’s budget of Rs205017 crore for 2025-26 was presented by the CM and finance minister (FM) Naib Singh Saini on 17th March 2025. It shows an increase of 13.70 % compared to 8.38% in the previous year’s revised estimate.
The budget speech creates auro by announcing a new department of future, a hub for innovation & entrepreneurship and the Sankalp Authority to control the drug menace. Among the budget announcements, the already better-off districts like Yamunanagar, Ambala, Kurukshetra, Sonepat, Karnal and Hisar are mentioned but, there is hardly any new scheme for less developed districts except a mustard oil mill somewhere and an aqua farm in Bhiwani and renovation of Loharu fort. The backward districts of Nuh, Mahendrargarh, Charkhi Dadri, and Bhiwani are devoid of any new projects or IMTs/industrial estate. Even the old demand for a High Court Bench for south Haryana which was prominent in the manifesto of BJP in 2014, has been forgotten.
Let it be noted that about 100 policemen from southern districts travel to Chandigarh to comply with various cases in the Punjab and Haryana High Court and the state has to bear their three-day official tour. The expenditure of litigants may be manifolds. There is no talk about taking administration near the people of far-off districts from Chandigarh. Thus, the budget may further accentuate the regional inequality in the state.
Skewed in favour of industry and urban population
The department-wise budget is skewed in favour of Industries and Commerce with increases in allocation by more than twofold, followed by about a 39 % increase for town and country planning, 36% for Agriculture allied activities, 30% for panchayats and rural development and 28% for social welfare. Health, education, and police have got a moderate increase from 7 to 12 %. Allocation for the Public Health and Public Works department is almost unchanged and allocation for energy decreased by about 25 %.
Hair raising concern about the budget is that out of its total revenue receipts; repayment of debt and interest takes 48.51 %, 25.02 % goes for salary, 12.91 % for pensions, and 13.02 % for the expenditure on social justice which is bulging every year. Thus almost total RRs (99.46%) are exhausted by these committed revenue items. The rest of the budget is managed mainly with borrowings and negligible capital receipts. Further, the implementation of the Lado Laxmi Yojana of Rs2100 per month for women is still looming large on the state. The revenue deficit (RD) of the state will reach Rs20600 crore and the outstanding debt will be Rs3.53 lakh crore at the end of the year 2025. Haryana is among the top 10 most indebted states and the state has almost reached the situation of neighbouring Punjab.
Camouflaging the debt
Government is well aware of the increasing debt problem which is why FM Cum CM tries to camouflage the fiscal situation within FRBM discipline. Anticipating criticism from the opposition, FM attempts to justify the RD and debt well within the stipulated limits in 8 initial pages of the budget speech. It corroborates with a local Bagar area saying, “टाकर वाला ऊट पहले ही करहाता है”i.e. “a camel with knee problem cries before sitting itself”. In this regard, the unprecedented increase in the Gross Domestic Product (GDP) of the state has been a guard to keep the debt around 26 % of GDP as against the stipulated limit of 33.1%. It is to be noted that the GDP of Haryana especially at current prices has recorded unprecedented growth and it helped in keeping the state debt to GDP ratio below the limit. However, the ground reality of increasing GDP at current prices appears to be doubtful. GDP at constant prices (2011-12 prices) was 85% of GDP at current prices in 2014 which was reduced to 68% in 2020-21 and 56 % in 2024-25. It means the growth rate of GDP at current prices has been much higher than that of the GDP at constant prices. Accordingly, the debt as % of GDP at current prices remained low. It is with the help of higher GDP that the FM attempts in his budget speech to camouflage the real level of RD, fiscal deficit and outstanding debt below the stipulated limits as per the FRBM Act.
Increasing revenue deficit and indebtedness cannot be sustained for a long time in the states and even at the national level. The Supreme Court (SC) also accepts the right of political parties to pursue their welfare agenda as per the directive principles of the Constitution. Presently, all political parties are using cash support to women and others as bribes for getting votes. It is to be noted that a cash distribution policy for one section of the population is subject to the surplus budget of the state or the nation. A state/nation cannot be benevolent by taking loans. It may not be legally justifiable too for a state to give freebies to one section of its population by taking loans in the name of all others. The SC may be within its limits to pass an order that only states with surplus budgets can provide free electricity or cash support to the poor; otherwise, India may also be heading towards the situation of Srilanka.
Disclaimer
Views expressed above are the author’s own.
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