1. Introduction
- On March 3, 2025, Finance Minister Radha Krishna Kishore presented the Jharkhand state budget for the financial year 2025–26. The budget outlines a strong focus on social welfare, infrastructure, and sectoral development while maintaining fiscal prudence.
- The total budget outlay is ₹1.45 lakh crore, up from ₹1.28 lakh crore in 2024–25.
2. Macroeconomic Overview
The Jharkhand economy continues to show strong signs of growth, with progressive fiscal indicators:
- Gross State Domestic Product (GSDP):
Projected at ₹5,56,286 crore for 2025–26, marking a 10% increase over the previous year. - Revenue Surplus:
Estimated at ₹14,517 crore, which is 2.6% of the GSDP, indicating prudent fiscal management and a healthy revenue-expenditure balance. - Fiscal Deficit:
Pegged at ₹11,253 crore, equivalent to 2% of GSDP, remaining well within the FRBM limits and reflecting fiscal discipline. - Per Capita GSDP (2023–24):
Stands at ₹1,15,960, showing a 9.1% rise compared to 2022–23, highlighting improved economic output and income levels per individual.
3. Receipts and Expenditure
Total Receipts (excluding borrowings): ₹1,25,400 crore
This includes revenue from both state sources and central transfers:
- State’s Own Tax Revenue:
₹35,200 crore (+4% over 2024–25 RE), reflecting stable tax base growth. - State’s Own Non-Tax Revenue:
₹25,856 crore (+29%), driven significantly by mineral revenue and the newly introduced mining cess. - Share in Central Taxes:
₹47,040 crore (+11%), indicating robust devolution from the Union Government. - Grants from the Centre:
₹17,057 crore (+22%), including centrally sponsored schemes and finance commission grants.
Total Expenditure (excluding debt repayment): ₹1,36,653 crore
A 12% increase over the previous year’s revised estimates, supporting both operational and capital needs:
- Revenue Expenditure:
₹1,10,637 crore (+12%), covering salaries, subsidies, pensions, and day-to-day administrative costs. - Capital Outlay:
₹22,621 crore (+18%), signifying a push towards infrastructure and asset creation in sectors such as education, water supply, and urban development. - Debt Repayment:
₹8,747 crore, ensuring timely servicing of state liabilities. - Loans and Advances:
₹3,396 crore (−27%), a reduction likely aligned with efforts to prioritize direct capital investments.
4. Major Policy Announcements
- Higher Education: Launch of the Jharkhand Student Research and Innovation Policy, 2025; two new universities focused on skill and fintech education.
- Skill Development: ₹585 crore allocated for skill training programs.
- Animal Husbandry: ₹255 crore for Mukhyamantri Pashudhan Vikas Yojana (targeting 79,000 beneficiaries).
5. Social Welfare Schemes
- Mukhyamantri Maiya Samman Yojana:
- Jharkhand Mukhyamantri Maiya Samman Yojana (JMMSY):
- A landmark welfare initiative aimed at providing financial assistance to women.
- Allocation: ₹13,363.35 crore.
- Women between 18 to 50 years are eligible for a monthly cash support of ₹2,500.
- This scheme alone accounts for nearly 11% of the state’s revenue receipts, underlining the government’s strong focus on women-centric development.
- Mukhyamantri Sarvajan Pension Yojana:
- ₹3,850 crore allocated.
6. Sector-Wise Allocations
| Sector | 2025–26 BE (₹ crore) | % Change from 2024–25 RE |
|---|---|---|
| Social Welfare & Nutrition | 23,914 | +39% |
| Education, Sports, Arts | 18,076 | +20% |
| Rural Development | 16,538 | +5% |
| Health & Family Welfare | 7,481 | +14% |
| Police | 7,396 | −6% |
| Energy | 6,655 | −6% |
| Transport | 6,241 | +1% |
| Agriculture & Allied | 6,007 | +9% |
| Water Supply & Sanitation | 4,721 | +99% |
| Urban Development | 3,425 | +47% |
7. Revenue and Fiscal Indicators
- Revenue Surplus: Improved from 2.3% to 2.6% of GSDP.
- Fiscal Deficit: Reduced from 2.3% to 2% of GSDP.
- Outstanding Debt: Projected at 27% of GSDP (lower than 27.5% in 2024–25).
- Power Sector Borrowing Room: Additional 0.5% of GSDP allowed under FRBM.
8. Revenue Sources
- State GST: ₹15,500 crore (+3%)
- Excise: ₹3,000 crore (+7%)
- Taxes on Vehicles: ₹2,400 crore (+5%)
- Electricity Duties: ₹1,600 crore (+10%)
Mining Cess: Estimated revenue of ₹6,400 crore (from newly introduced law in 2024).
9. Healthcare and Education Infrastructure
Medical Education Expansion:
- Seven new medical colleges announced across the state in:
- Ranchi, Khunti, Giridih, Jamshedpur, Dhanbad, Deoghar, and Jamtara.
- This move aims to:
- Improve access to quality healthcare.
- Generate medical professionals locally.
- Boost the healthcare economy in underserved districts.
Higher Education Initiatives:
- New universities to be established in:
- Jamshedpur, Gumla, and Sahibganj.
- These institutions will focus on research, innovation, skill development, and regional empowerment.
10. Comparison with Other States
- Jharkhand has higher than average allocations in rural development and water supply, but lower in education, health, and agriculture.
| Sector | Jharkhand % | Average (All States) |
|---|---|---|
| Education | 13.6% | 15.0% |
| Health | 5.6% | 6.2% |
| Rural Development | 12.4% | 5.1% |
| Police | 5.5% | 4.1% |
| Agriculture | 4.5% | 6.3% |
| Water Supply & Sanitation | 3.5% | 2.5% |
11. Conclusion and Recommendations
Conclusion
The Jharkhand Budget 2025–26 marks a strong commitment to social justice, infrastructure development, and fiscal discipline. The government’s decision to maintain a revenue surplus and limit the fiscal deficit to 2% of GSDP reflects commendable prudence, especially given the state’s developmental challenges.
A significant feature of the budget is its inclusive focus on welfare, especially for women (via Mukhyamantri Maiya Samman Yojana) and marginalized communities. The large allocation for rural development and education suggests a long-term view toward capacity building and equitable growth.
Furthermore, the mining sector reforms and the newly introduced mineral cess could boost the state’s own revenues, reducing dependence on central transfers.
However, there are areas that require strengthening to ensure sustained, inclusive, and broad-based development.
Suggestions for Improvement
1. Increase Investment in Health and Education
- Jharkhand spends below the national average on health (5.6%) and education (13.6%).
- To improve human capital indicators like literacy, school completion rates, and health outcomes, the state should gradually raise allocations to meet or exceed national averages.
2. Enhance Capital Expenditure Efficiency
- Although capital outlay has increased by 18%, prior year data shows underutilization.
- Improve project planning, procurement processes, and execution capacity to ensure timely and quality delivery of public infrastructure projects.
3. Strengthen Urban Infrastructure
- Urban development has seen a 47% increase, but still receives a small share of total expenditure.
- With urbanization growing, there’s a need to develop robust urban transport, housing, and civic infrastructure, particularly in Ranchi, Jamshedpur, and Dhanbad.
4. Diversify Revenue Base
- Mining accounts for ~80% of non-tax revenue. This poses a risk due to global commodity price fluctuations.
- Jharkhand could:
- Develop tourism (especially eco and cultural tourism).
- Leverage IT and fintech investments (as indicated by the proposed fintech university).
- Encourage small-scale industries and start-ups.
5. Reconsider Cash Transfer Strategy
- The Mukhyamantri Maiya Samman Yojana (₹13,363 crore) is nearly 11% of revenue receipts.
- While the intent is noble, such schemes can strain state finances over time.
- Suggested: Couple cash transfers with skills training or employment-linked conditions to enhance impact and sustainability.
6. Improve Fiscal Transparency and Monitoring
- Use digital tools to publicly monitor progress on schemes, fund utilization, and outcomes.
- This would enhance accountability and citizen trust, and help curb leakages.
Sources:
FM Speech- Jharkhand Budget 2025-26