Bihar budget expected to focus on infrastructure and job creation
PATNA: Bihar’s 2022-2023 budget, due to be presented on February 28, is expected to focus on infrastructure, job creation and incentives for entrepreneurs to spur growth after two years of pandemic-induced economic crisis, said officials aware of the matter.
The state government is believed to have secured assurances of up to ₹10,000 crore in interest-free loans under the Capital Expenditure Fund (CAPEX) of ₹1 lakh crore for states in the Union budget for infrastructure.
“Bihar is eligible to get 10% of the total fund as interest free loans. In this way, he can borrow up to ₹10000 crore to be repaid in the next 50 years. This fund will be used for capital expenditures with the possibility that new state projects will be taken for roads, electricity, village development, etc. said an official, who did not wish to be named.
A second official said the government would soon send out proposals for infrastructure-related projects to use the fund. Disbursements should start from May or June.
Bihar has received loans from ₹843 crores in 2020-21 and ₹1246 crore in 2021-22 from the Center under the fund.
Officials said the budget could contain big announcements in terms of job creation in the private and public sectors to spur growth. Opposition Rashtriya Janata Dal has criticized the government for failing to deliver on its election promise of 1.9 million jobs.
The government accelerated the recruitment of 42,000 teachers. It is likely to invite applications for vacancies in health, business tax and other departments.
Expenditure from the state budget is expected to be approximately ₹2.25 lakh crore, an increase of about ₹7000 crore. Officials said the government was optimistic about higher central devolutions and better internal revenues, but was keen to keep the size of the budget realistic.
The Comptroller and Auditor General of India said earlier that the government prepared unrealistic budgets by spending far less than total expenditure. In 2020-2021, the government managed to spend only ₹1.66 crore lakh against ₹2.11 million crores. In the current fiscal year, expenditures are expected to be ₹2 lakh crore against the budget allocation of ₹2.18 lakh crore.
The government is expected to announce more incentives for entrepreneurs under Mukhya Mantri Udyami Yojana to create jobs. “There is an assumption that the state faced with the challenges of providing employment to returned migrants and creating jobs will focus on entrepreneurship as a way to tackle unemployment,” said Bakshi Amit Kumar Sinha, Assistant Professor at the Center for Economic Policy and Public Finance.
He said the 2.5% growth in the state’s gross domestic product in 20-21 despite economic contraction reflected a sustainable growth trajectory. Sinha said the government should focus on capital spending and fill vacancies in the health sector and rural infrastructure. “Higher public investment will give the economy an impetus for higher growth.”