State Budget Basics

Prerequisites

• State Economy at a Glance: the GSDP figures that deficits are measured against
• Public Finance: budget terms, deficits and Finance Commission transfers in general
• State Government: the Governor, Council of Ministers and Vidhan Sabha

The Hook: GYAN, GATI, SANKALP

Why it matters: Prelims asks budget themes, sizes and Articles. Mains GS-III asks about the state’s fiscal health, its revenue sources and whether welfare spending is sustainable.

The Constitutional Framework

The Constitution never uses the word “budget”. It speaks of the Annual Financial Statement (वार्षिक वित्तीय विवरण). The state provisions in Articles 202–207 mirror the Union provisions in Articles 112–117.

Charged Expenditure (not voted by the Assembly)

• Emoluments and allowances of the Governor and expenditure of the Governor’s office
• Salaries and allowances of the Speaker and Deputy Speaker of the Vidhan Sabha
• Debt charges of the state, including interest
• Salaries and allowances of High Court judges
• Sums to satisfy court judgments, and other expenditure declared charged by the Constitution or by law (for example, expenses of the State Public Service Commission, under Article 322)

How the Budget Moves Through the Vidhan Sabha

graph TD
    A["Economic Survey tabled (review of past year)"] --> B["Finance Minister presents the budget (Annual Financial Statement, Art. 202)"]
    B --> C["General discussion on the budget as a whole"]
    C --> D["Departmental demands for grants voted (Art. 203); cut motions possible"]
    D --> E["Guillotine: remaining demands put to vote together"]
    E --> F["Appropriation Bill passed (Art. 204)"]
    F --> G["Finance / taxation bills passed"]
    G --> H["Governor's assent; money can be withdrawn"]

• The Finance Department prepares the budget; the Finance Minister presents it in the budget session, usually in February–March, so it passes before the financial year begins on 1 April.
• Cut motions let members reduce a demand: a policy cut (reduce to ₹1, disapproving the policy), an economy cut (reduce by a stated amount) and a token cut (reduce by ₹100, to voice a specific grievance).
• If the full budget cannot pass before 1 April, a vote on account (Article 206) allows spending for part of the year.

Where the Money Comes From

Deficits in One Table

The state’s fiscal discipline law is the Chhattisgarh Fiscal Responsibility and Budget Management Act (2005). Like other states’ FRBM laws, it targets eliminating the revenue deficit and capping the fiscal deficit, normally at 3% of GSDP, with extra borrowing room allowed by the Centre in particular years (for example, for power-sector reforms or capital spending).

The Last Three Budgets

All three were presented by Finance Minister O. P. Choudhary of the Vishnu Deo Sai government (in office since December 2023).

2025-26 Highlights (GATI)

• No new taxes.
• Capital expenditure of ₹26,341 crore, about 16% of the budget and 4.14% of GSDP, among the highest capex-to-GSDP ratios of Indian states.
• GSDP for 2025-26 assumed at ₹6,35,918 crore, 12% above 2024-25 (₹5,67,880 crore).

2026-27 Highlights (SANKALP)

Source for the 2026-27 fiscal figures: PRS Legislative Research budget analysis. Figures are budget estimates and will be revised.

Analysis: Is the Fiscal Path Sustainable? (Mains material)

Positives

1. High capital expenditure builds roads, irrigation and power, which raises future growth.
2. Mineral revenue gives a stronger own non-tax base than many states.
3. Low revenue deficit in the 2026-27 estimates means most borrowing is meant for capital assets.

Concerns

1. Committed expenditure (salaries, pensions, interest) leaves limited room.
2. Large cash transfers and procurement support (Mahtari Vandan, Krishak Unnati) are recurring, not one-time.
3. Dependence on central transfers and on volatile mineral prices.
4. Rising debt if fiscal deficits stay above 3% for many years.

Balanced view: welfare spending on women, farmers and nutrition is also an investment in human capital. The test is outcome-based budgeting: measure what each rupee achieves, prune overlapping schemes and protect capital spending.

Memory Tricks

Don’t Confuse

Common Mistakes

Practice

These are original practice questions written in CGPSC style. They are not previous-year questions.

Level 1: Foundation

1. The Constitution calls the state budget the ________ (Article ________).
2. The theme of Chhattisgarh’s budget for 2024-25 was ________, standing for Gareeb, Yuva, Annadata and Nari.
3. No money can be withdrawn from the Consolidated Fund of the State without an ________ Act (Article 204).

Level 2: Prelims MCQs

Q1. Consider the following statements about the state budget:

1. Expenditure charged on the Consolidated Fund of the State is not submitted to the vote of the Vidhan Sabha.
2. The salaries and allowances of High Court judges are charged on the Consolidated Fund of the State.
3. A demand for grant can be moved in the Vidhan Sabha without the Governor’s recommendation.

Which of the statements given above is/are correct?

(a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3

Q2. Match List-I (Budget year of Chhattisgarh) with List-II (Theme):

(a) A-2, B-3, C-1 (b) A-3, B-2, C-1 (c) A-2, B-1, C-3 (d) A-1, B-3, C-2

Q3. In the 2025-26 Chhattisgarh budget, the letter “T” in the acronym GATI stood for:

(a) Tourism (b) Technology (c) Tribal welfare (d) Taxation

Q4. Which Article of the Constitution provides for a vote on account in a state legislature?

(a) Article 204 (b) Article 205 (c) Article 206 (d) Article 207

Q5. The fiscal deficit of a state is best described as:

(a) revenue expenditure minus revenue receipts (b) total expenditure minus revenue receipts and non-debt capital receipts (c) fiscal deficit minus interest payments (d) total expenditure minus tax revenue

Level 3: Mains Answer Writing

Q1. Explain the procedure for passing the state budget in the Chhattisgarh Vidhan Sabha. (100–150 words)

Q2. Evaluate the fiscal position of Chhattisgarh in the light of its recent budgets. (250 words)

Quick Revision Table

Key Takeaways

What’s Next

• Flagship Welfare Schemes: the schemes these budgets fund
• Public Distribution System: the state’s biggest food-security commitment
• Centre-State Relations: financial relations, Finance Commission and GST
• Constitutional Bodies: the Finance Commission and the CAG who audits state accounts