Economy of Madhya Pradesh PDF Download

Economy of Madhya Pradesh PDF Download: The economy of Madhya Pradesh refers to the economic growth with respect to the Indian state of Madhya Pradesh. It grew 12% in GDP for the year of 2011–12, for which it received an award from the President Pranab Mukherjee in January 2013 for improving its tourism, medical and infrastructural growth. The economy of Madhya Pradesh is significantly agrarian which is reflecting rapid strides towards industrial and service sectors as well. The Indore, Bhopal and Jabalpur districts are the top 3 districts in terms of highest output generation in the state’s economy.

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As per the official data released by the Directorate of Economics and Statistics (Madhya Pradesh) the districts of Indore, Bhopal, Jabalpur, Gwalior, Chhindwara, Ujjain, Sagar and Dewas constitute top 8 leading districts to the larger economy of Madhya Pradesh. The following is the estimated Gross District Domestic Product at Current Prices (Nominal GDP) basis, as released by the Directorate of Economics and Statistics (Madhya Pradesh) for the year 2020-21.

Economy of Madhya Pradesh

Madhya Pradesh’s gross state domestic product (nominal GDP) for 2013–14 was ₹ 4,509 billion (approximately US$ 72,726,000,000). The per-capita figure was US$ 871.45 in 2013–14, the sixth-lowest in the country. Between 1999 and 2008, the annualised growth rate of the state was very low: 3.5%. Subsequently, the state’s GDP growth rate has improved significantly, rising to 8% during 2010–11 and 12% during 2011–12.

Madhya Pradesh is also famous for honey production in district Morena.

The state has an agrarian economy. The major crops of Madhya Pradesh are wheat, soybean, gram, sugarcane, rice, maize, cotton, rapeseed, mustard and Arhar. Minor Forest Produce (MFP), such as tendu leaves used to roll beedi; sal seed, teak seed, and lak also contribute to state’s rural economy.

The following is a table showing the trend of the gross state domestic product of Madhya Pradesh at market prices estimated by Ministry of Statistics and Programme Implementation with figures in the millions of Indian Rupees.

Until 2005, there was only one S&P CNX 500 conglomerate with its corporate office in Madhya Pradesh viz. Ruchi Soya Industries (2005 gross income Rs 49,661 million). Now there are many big industries based in the state. State-run NTPC will invest about Rs 20,000 crore to set up a 3,960-megawatt (Mw) coal-based power project in Madhya Pradesh and has signed a memorandum of understanding with the state government and MP Power Trading Company regarding this.

Major industrial areas surrounding the city include the Pithampur Special Economic Zone and the Sanwer Industrial belt. While textile manufacturing and trading are the oldest contributors to the economy, real estate has emerged very fast in past few years.

Bhopal, the capital city of Madhya Pradesh is named after Raja Bhoj and is the second-largest city in the state both in terms of population and in terms of area. Initially its economic growth stalled because of the Bhopal Gas Tragedy but has now started growing again.[14] Its economy is mainly based on industries. It is an important industrial center of the state. Electrical goods, cotton, chemicals, and flour milling are the main source of economy. Zardozi and embroidery of Bhopal’s old city is also famous. The district is highly urbanised with nearly 80% of the population marked as urban. Now being a metropolitan city, many Software/IT sector companies are setting up offices in the city. Bhopal is also an important tourist place with the following destinations near the city:

Birla Mandir, Bharat Bhavan, Kamla Park, Kilol Park, Lal Ghati, Van Vihar are very interesting places in Bhopal
Bhojpur Temple (28 km away): Archeological site of the Pre Paleolithic era.
Bhimbetka rock shelters (45 km away): Archeological site of the Paleolithic era. A UNESCO World Heritage Site.
Sanchi Stupa (46 km away): A Buddhist Stupa commissioned by the emperor Ashoka the Great in the 3rd century BC

Madhya Pradesh Budget Analysis 2023-24

The Finance Minister of Madhya Pradesh, Mr. Jagdish Devda, presented the Budget for the state for the financial year 2023-24 on March 1, 2023.

In 2023-24, Madhya Pradesh is estimated to spend Rs 1,07,313 crore on committed expenditure, which is 48% of its revenue receipts. This is an increase of 14% over the revised estimate of 2022-23. This comprises spending on salaries (27% of revenue receipts), pension (10%), and interest payments (10%).

Budget Highlights

The Gross State Domestic Product (GSDP) of Madhya Pradesh for 2023-24 (at current prices) is projected to be Rs 13, 87,117 crore. This is a growth of 5% over the revised estimate of GSDP for 2023-24 (Rs 13, 22,821 crore).

Expenditure (excluding debt repayment) in 2023-24 is estimated to be Rs 2, 81, 552 crore, a 12% increase over the revised estimates of 2022-23. In addition, debt of Rs 24,551 crore will be repaid by the state.

Receipts (excluding borrowings) for 2023-24 are estimated to be Rs 2, 25, 843 crore, an increase of 11% as compared to the revised estimate of 2022-23. In 2022-23, receipts (excluding borrowings) are estimated to Rs 8,804 crore higher than the budget estimate (increase of 4.5%).

Revenue surplus for 2023-24 is estimated to be Rs 413 crore, which is 0.03% of the GSDP. In 2022-23, revenue surplus is estimated to be 0.11% of GSDP. The budget for 2022-23 had estimated a revenue deficit of 0.32% of GSDP.

Fiscal deficit for 2023-24 is targeted at Rs 55,708 crore (4% of GSDP). In 2022-23, as per the revised estimates, fiscal deficit is expected to be 3.6% of GSDP, lower than the budget estimate of 4.6% of GSDP.

Policy Highlights:

Food subsidy scheme: Under the new scheme, Rs 1,000 will be transferred to the bank accounts of women belonging to backward tribes (Baiga, Bariya, and Sahariya) in order to address malnutrition.

Skill Development: The Chief Minister Skill Apprenticeship Scheme will be formulated to provide skill development to the youth.

Electricity: In order to ensure an uninterrupted supply of electricity, the state will create additional infrastructure in 2023-24, which includes 970 circuit km of transmission lines, six sub-stations, and 349 km of distribution lines.

Chief Minister’s Balika Scooty Scheme: Under the new scheme, e-scooters will be distributed to female students who attain the highest marks at the higher secondary level.

Madhya Pradesh’s Economy

GSDP: The growth rate of Madhya Pradesh’s GSDP (at constant prices) was 10.1% in 2021-22, over a low base in 2020-21. GSDP contracted by 1.9% in 2020-21. In comparison, national GDP is estimated to grow at 8.7% in 2021-22.

Sectors: In 2021-22 (at current prices), agriculture, manufacturing, and services sectors contributed to 47%, 19%, and 34% of the economy. In 2020-21, only agriculture recorded positive growth.

Per capita GSDP: The per capita GSDP of Madhya Pradesh in 2021-22 (at current prices) was Rs 1, 37,339. Since 2018-19, per capita GSDP has grown at an annualised rate of 8%.

Budget Estimates for 2023-24

Total expenditure (excluding debt repayment) in 2023-24 is targeted at Rs 2, 81, 552 crore. This is an increase of 12% over the revised estimate of 2022-23. This expenditure is proposed to be met through receipts (other than borrowings) of Rs 2, 25, 843 crore and net borrowings of Rs 55,549 crore. Total receipts for 2023-24 (other than borrowings) are expected to register an increase of 11% over the revised estimate of 2022-23.

Revenue surplus in 2023-24 is estimated to be 0.03% of GSDP (Rs 413 crore). The 2022-23 budget estimated a revenue deficit of Rs 3,736 crore (0.3% of GSDP), but as per the revised estimates, the state will observe a revenue surplus of Rs 1,499 crore (0.1% of GSDP). Fiscal deficit for 2023-24 is estimated to be 4% of GSDP (Rs 55,708 crore). As per the revised estimates, in 2022-23, the fiscal deficit of the state is expected to be 3.6% of GSDP, which is lower than the budget estimate of 4.6%.

Expenditure in 2023-24

Revenue expenditure for 2023-24 is proposed to be Rs 2, 25,297 crore, which is an 11% increase over the revised estimate of 2022-23. This expenditure includes the payment of salaries, pensions, interest, and subsidies.

Capital outlay for 2023-24 is estimated to be Rs 54,056 crore, an increase of 19% over the revised estimate of 2022-23. Capital outlay indicates the expenditure towards creation of assets.

Rising Committed Expenditure

Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest. From 2016-17 to 2021-22, committed expenditure for Madhya Pradesh has increased from 32% of revenue receipts to 42%. Pension expenditure is also projected to rise from Rs 23,011 crore in 2023-24 to Rs 69,062 crore in 2030-31. Increased spending on committed expenditure leaves less flexibility for developmental expenditure.

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest. A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital outlay. In 2023-24, Madhya Pradesh is estimated to spend Rs 1,07,313 crore on committed expenditure, which is 48% of its revenue receipts. This is an increase of 14% over the revised estimate of 2022-23. This comprises spending on salaries (27% of revenue receipts), pension (10%), and interest payments (10%). In 2023-24, payments towards salaries are estimated to increase by 18% over the revised estimates of 2022-23.

Receipts in 2023-24

Total revenue receipts for 2023-24 are estimated to be Rs 2, 25,710 crore, an increase of 11% over the revised estimate of 2022-23. Of this, Rs 1, 01,413 crore (45%) will be raised by the state through its own resources, and Rs 1, 24,297 crore (55%) will come from the centre. Resources from the centre will be in the form of state’s share in central taxes (36% of revenue receipts) and grants (20% of revenue receipts).
Devolution: In 2023-24, receipts from the state’s share in central taxes are estimated to increase by 8% over the revised estimate of 2022-23.
Grants from the centre in 2023-24 are estimated at Rs 44,113 crore, an increase of 18% over the revised estimates for 2022-23 (Rs 37,488 crore). In 2022-23, grants from the centre are estimated to be 16% lower than the budget estimate. This could be due to the discontinuation of GST compensation grants in June 2022. GST compensation grants received by the state are estimated to decrease by 86% between the budget and revised estimates of 2022-23.
State’s own tax revenue: Total own tax revenue of Madhya Pradesh is estimated to be Rs 86,500 crore in 2023-24, an increase of 11% over the revised estimate of 2022-23. In 2023-24, the state’s own tax to GSDP ratio is estimated to be 6.2%. In 2022-23, this ratio is estimated to be 5.9% which is lower than the budget estimate (6.3%).

Deficits, Debt, and FRBM Targets for 2023-24

The Madhya Pradesh Fiscal Responsibility and Budget Management (FRBM) Act, 2005 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit and fiscal deficit of the state government.
Revenue surplus: Revenue balance is the difference of revenue expenditure and revenue receipts. A revenue surplus implies that the government’s recurring expenses, which do not increase its assets or reduces its liabilities, can be financed through its receipts. The budget estimates a revenue surplus of Rs 413 crore in 2023-24 (0.03% of GSDP). The state had observed a revenue surplus from 2016-17 to 2018-19. However, from 2019-2020 to 2020-21, a revenue deficit was recorded, due to the COVID-19 pandemic. A revenue surplus of Rs 1,499 crore is expected in 2022-23 as per revised estimates.
Fiscal deficit: It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government and leads to an increase in total liabilities. In 2023-24, the fiscal deficit is estimated to be Rs 55,708 crore (4% of GSDP). This is higher than the 3.5% limit as per the FRBM Act. The budget for 2022-23 estimated fiscal deficit at 4.6% of GSDP, which was reduced to 3.6% at the revised stage. In absolute numbers, the revised estimate for fiscal deficit is 10% less than the budget estimate. This is because net receipts increased by 4.5% while net expenditure increased by 1.5% between the budget and revised estimates of 2022-23.
Outstanding liabilities: Outstanding liabilities is the accumulation of total borrowings at the end of a financial year, it also includes any liabilities on public account. In 2023-24, the outstanding liabilities are estimated to be 30% of the GSDP, marginally higher than the revised estimate for 2022-23 (29% of GSDP).

The budget for the year 2023-24 was presented for the first time in the form of e-budget.

The total investment amounts to Rs.3, 14, 024, 84 crore, which is 12% more than the previous year. Total net expenditure provision of Rs.2, 81,553.62 crore.
Revenue surplus Rs 412.76 crore.
Fiscal deficit estimated at 4.02% of the Gross State Domestic Product.
The estimated revenue receipts are Rs 2,25,709.90 crore, in which the state’s own tax amount is Rs 86,499.98 crore, the state’s share in central taxes is Rs 80,183.67 crore, non-tax revenue Rs 14,913.10 crore and grants-in-aid received from the center Rs 44,113.15 crore.
State own tax revenue is expected to increase by 11% in the year 2023-24 as compared to the revised estimate of 2022-23.
Estimated increase of 11% in revenue expenditure in the year 2023-24 as compared to the revised estimate of the year 2022-22.
In the year 2023-24, an increase of about 15% in the capital outlay is estimated as compared to the revised estimate of the year 2022-23.
Estimated capital outlay in the year 2023-24 estimated at 4% of the state’s GDP.
Revenue surplus in 2023-24 of the state’s GDP is 0.03%.
In the year 2023-24, interest payment will be 10% of the total revenue receipts.

Some key points of the budget

36,950.16 Crore for Scheduled Tribes (sub-scheme).
260 for SC (sub-scheme), Rs.86.81 crore.
11406 crores for the establishment of government primary schools.
8000 crores for Prime Minister’s Housing Scheme.
8000 crores for Chief Minister Ladli Bahna Yojana.
7332 crores for Jal Jeevan Mission National Rural Drinking Water Mission.
6935 crores to assist in carrying out required reforms as per 15th Finance Commission.
5520 crores for Atal Krishi Jyoti Yojana.
5520 crores for Atal Krishi Jyoti Yojana.
4775 crores in reimbursement for free electricity supply by MPVIM to 5 HP agricultural pumps/threshers and one light connection.
4641 crores for government high/higher secondary schools.
4176 crores for grants to local bodies as per the recommendation of the 15th Finance Commission.
4039 crores for Samagra Shiksha Abhiyan.
3996 crores for National Health Mission (NUHM/NRHM).
3526 crores for Revamped Distribution Sector Scheme (RDSS).
3500 crores for the National Rural Employment Guarantee Scheme.
3500 crores for Atal Griha Jyoti Yojana.
3230 crores for CM Rise.
3230 crores for the Chief Minister’s Farmers Welfare Scheme.
2800 crores for housing for all.
2001 crore for Pradhan Mantri Fasal Bima Yojana.
1916 crore for social security and welfare.
1826 crore for Pradhan Mantri Gram Sadak Yojana.
1356 crore for solar energy for irrigation and drinking water schemes.
1272 crore for Minimum Requirement Programme Special Nutrition Diet Scheme.
1250 crore for Investment Promotion Scheme.
1144 crore for Indira Gandhi National Old Age Pension.
1131 crore for formulation of Disaster Management Plans.
1020 crore for the construction/upgradation of rural roads and other district roads.
1000 crore rupees for the Chief Minister’s Farmers Crop Procurement Assistance Scheme.
1000 crore for the Chief Minister’s Skill Apprenticeship Scheme.

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Madhya Pradesh Budget Analysis 2023-24

Madhya Pradesh’s Economy

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