Jharkhand, a state carved out of Bihar in 2000, has been navigating the complexities of managing its financial resources while fostering development. Its finances and budget allocations are instrumental in ensuring socio-economic growth, addressing developmental challenges, and fulfilling governance objectives. This article delves into various aspects of Jharkhands state finances, including revenue sources, expenditure patterns, fiscal challenges, and budgetary priorities.
Revenue Sources of Jharkhand
Jharkhands revenue comes from two primary sources: Own Revenue and Central Transfers.
1. Own Revenue
Tax Revenue: This includes Goods and Services Tax (GST), value-added tax (VAT) on petroleum products and liquor, stamp duties, and taxes on vehicles.
GST: A significant contributor to Jharkhands tax revenue, showcasing the states compliance with federal tax reforms.
Mineral Royalties: Jharkhand, rich in mineral resources like coal and iron ore, earns substantial revenue through mining leases and royalties.
Non-Tax Revenue: Includes income from state enterprises, forestry, irrigation, and other administrative services.
2. Central Transfers
Share in Central Taxes: The state receives a fixed share of central taxes as per the recommendations of the Finance Commission.
Grants-in-Aid: These include grants for centrally sponsored schemes and other financial assistance provided by the Union Government.
Expenditure Patterns
Jharkhands expenditure is broadly categorized into Revenue Expenditure and Capital Expenditure.
1. Revenue Expenditure
Committed Expenditure: Salaries, pensions, and interest payments constitute a significant portion.
Developmental Expenditure: Focuses on sectors like education, healthcare, and social welfare programs.
Subsidies: Subsidies in electricity, food, and agriculture are aimed at improving the quality of life for disadvantaged sections.
2. Capital Expenditure
Infrastructure Development: Investments in roads, railways, power generation, and irrigation.
Public Works: Enhancing public infrastructure, including schools, hospitals, and administrative buildings.
Debt Repayment: Capital expenditure includes repayments for loans availed for development projects.
Fiscal Challenges
Despite its revenue streams, Jharkhand faces significant fiscal challenges:
1. Dependence on Mineral Royalties
Jharkhands reliance on mineral revenue makes its finances vulnerable to fluctuations in global commodity prices and environmental regulations.
2. Revenue Deficit
The state often faces a mismatch between its revenue receipts and revenue expenditure, leading to fiscal stress.
3. High Debt Burden
To meet developmental needs, Jharkhand frequently resorts to borrowing, which escalates its debt servicing obligations.
4. Implementation Bottlenecks
Delay in project execution and underutilization of funds hamper effective budget implementation.
Budget Allocations
1. Education
Emphasis on improving literacy rates and school infrastructure.
Initiatives like Sarva Shiksha Abhiyan (SSA) and Mid-Day Meal schemes are allocated significant funds.
2. Healthcare
Allocation for National Health Mission (NHM) and health infrastructure enhancement.
Special focus on combating diseases like tuberculosis and malaria.
3. Agriculture and Rural Development
Budget for Pradhan Mantri Fasal Bima Yojana and irrigation projects.
Focus on rural employment through Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
4. Infrastructure Development
Increased funding for road connectivity, bridges, and railways.
Promotion of public-private partnerships (PPPs) in urban infrastructure projects.
5. Social Welfare
Schemes for women empowerment, tribal welfare, and child development.
Special focus on Scheduled Tribes (ST), Scheduled Castes (SC), and Other Backward Classes (OBC).
Key Fiscal Reforms and Initiatives
1. GST Implementation
Streamlined tax collection and reduced tax evasion, bolstering state revenues.
2. E-Governance
Digital platforms for tax filing and public expenditure monitoring have improved transparency.
3. Debt Management
Efforts to refinance expensive loans and improve debt sustainability.
4. Fiscal Responsibility and Budget Management (FRBM) Act
Adherence to fiscal discipline under the FRBM Act ensures accountability in managing state finances.
Comparative Analysis with Other States
Jharkhand's fiscal performance is comparable to other mineral-rich states like Odisha and Chhattisgarh. While it benefits from natural resources, its socio-economic indicators often lag due to uneven resource distribution and governance challenges.
Key Metrics
Future Outlook
Diversification of Revenue: Reducing dependence on mineral resources by promoting tourism, IT, and manufacturing.
Infrastructure Push: Strategic investments in infrastructure to boost economic growth.
Social Sector Investments: Enhancing allocations for education and healthcare to improve Human Development Index (HDI) rankings.
Environmental Sustainability: Balancing mining activities with environmental conservation.
JPSC Notes brings Prelims and Mains programs for JPSC Prelims and JPSC Mains Exam preparation. Various Programs initiated by JPSC Notes are as follows:-- JPSC Mains Tests and Notes Program
- JPSC Prelims Exam 2024- Test Series and Notes Program
- JPSC Prelims and Mains Tests Series and Notes Program
- JPSC Detailed Complete Prelims Notes