The Deputy Chief Minister (CM) of Bihar Tarkishore Prasad, who holds the finance portfolio, presented his maiden Rs 2,18,302.70 crore revenue-surplus state budget of Bihar for FY22, which is Rs 6,541.21 crore more than the FY21 estimates of Rs 2,11,761.49 crore.

• The state’s fiscal deficit in the budget has been estimated at Rs 22,510.78 crore which is 2.97% of the Gross State Domestic Product (GSDP), estimated at Rs 7,57,026 crore. The budget proposed to keep the fiscal deficit target within the 3% limit.
•  Notably, no new taxes are imposed and it is proposed to develop infrastructure and social sectors, and entrepreneurship.
• Bihar has consistently claimed to be a revenue-surplus state since 2004-05.

Key Points:

–The highest allocation of Rs 38,035.93 crore has been made for education, followed by Rs 16,835.67 crore for rural development, Rs 15,227.74 crore for roads, Rs 13,264.87 crore for health and Rs 8,560 crore for energy.

–A sum of Rs 200 crore has been allocated for the industries department on the lines of the state government promise to create 20 lakh employment opportunities by 2025.

–An allocation of Rs 4,671 crore was made for the second phase of ‘Saat Nischay’ (seven resolves) programme

• ‘Saat Nischay’ scheme include Promotion of entrepreneurship, enhancement of skill, improvement of irrigation facilities, strengthening of health infrastructure, better connectivity and development of clean and prosperous villages and cities.

–There is also a proposal of setting up of universities for imparting higher learning in medical, engineering and sports.

—Rajgir, one of the state’s most popular tourist destinations, has been proposed as the site for the sports university besides an international cricket stadium and sports academy.

Creation of separate department for skill development and entrepreneurship

To ensure better coordination for running ITIs (Industrial Training Institutes) and polytechnic colleges the state government proposed to set up skill development and entrepreneurship. Currently, ITIs run by the labour department and polytechnic colleges are administered by the science and technology department.

• To encourage entrepreneurship, grants will be given by the government for startups upto 50% of one’s project cost or up to Rs 5 lakh. Loans up to Rs 5 lakh at a nominal 1% interest rate also provided.

• Women entrepreneurs will be given special incentives in the form of interest-free loans of up to Rs 5 lakh.

Bihar registers 10.5% growth rate

In accordance with the 15th Bihar Economic Survey 2020-21, the state recorded a 10.5% growth rate (at constant prices) in 2019-20, higher than the growth rate of the Indian economy (estimated to be around 5%).

• He also tabled the Bihar Settlement of Taxation Disputes (Second) Ordinance, 2020, while Parliamentary Affairs minister Vijay Kumar Choudhary tabled the Bihar State Higher Education Council (2nd Amendment) Ordinance, 2020.

Key Points from Survey:

–The share of revenue expenditure in the total expenditure has increased from 74.4% in 2015-16 to 86% in 2019-20, while the share of expenditure in the capital account has declined from 25.6% to 14% during the same period.

–The tertiary sector (the service sector including retail, financial services, hospitality, real estate, etc.) recorded a noticeable increase in its share—up from 57.3% in 2013-14 to 60.2% in 2019-20, largely due to growth in road transport and other services.

–The report shows financial management in the state was within the prescribed limits of the Fiscal Responsibility and Budget Management Act (FRBMA), 2006.