MP BUDGET 2025: 45 percent budget being spent on payment of salary-allowance, pension, loan and interest

Vaibhav Sridhar, Naiduniya, Bhopal (MP Budget 2025). The budget of Madhya Pradesh is about 3.65 lakh crore rupees. About 45 percent of this is being spent on payment of salary and allowances, pension, loans and interest only. The government is going to recruit one lakh posts. It is estimated that this expenditure will increase further.

Establishment expenditure will also increase due to dearness allowance, annual increment and increase in remuneration. On the other hand, the debt burden on the government is also increasing. This financial year 2024-25 has increased to around Rs 1.25 lakh crore. Recently a loan of six thousand crore rupees has been taken.

Advice to avoid borrowing

Although this debt is being taken within the range of three percent of the GDP, but the debt burden is increasing. On the other hand, the CAG in its report questioned the government’s financial management and advised to avoid borrowing for revenue expenditure.

The number of employees in the state, including regular, contract and pensioners, is around 12-13 lakhs. The expenditure of Rs 90 thousand 548 crore on their salary and allowances is estimated in the financial year 2024-25. According to the new recruitment, departments will have to appoint in the establishment expenditure in the budget.

Eight to ten thousand employees will also retire

The annual increment will also have to be given, for which the Finance Department has already said to increase the three percent installation expenditure and propose. Similarly, eight to ten thousand employees will also be retired. The amount will also be spent in the payment of their teachers including pension. Currently, about 25 percent of the revenue receipts are being spent on installation.

Dearness allowance will reach 64 percent

The Government of India increases the dearness allowance of its employees in January and July. According to this, there is a system to increase dearness allowance and pensioners’ inflation relief in the state. However, this sequence has been disturbed for some time.

The state employees are currently being given dearness allowance at the rate of 50 percent, which is three percent less than the central employees. The Finance Department has asked all the departments to keep an idea in the establishment expenditure at 64 percent. Similarly, if we look at the expenses being incurred in debt and interest payment, it is estimated at about 30 thousand crores in the financial year 2024-25.

If all these committed expenses are mixed, then this amount is one lakh 17 thousand 945 crore rupees i.e. about 45 percent of the revenue receipts. It is obvious that when the government spends such a large part of revenue income in paying salaries, loans and paying its interest, then it will be challenging to manage the amount for development schemes.

Loan being taken without interest

This is the reason that the government is increasing capital investment to promote economic activities and speed up development projects. For this, a loan is being taken from the Central Government for long -term interest under the Special Assistance Scheme.

Work is also being done on finding new income options. On the other hand, the opposition party Congress claims that the government’s financial situation is messing up. The burden of debt has increased so much that the loan is also being taken to repay the loan.

Not once over the situation of over draft

On the other hand, Deputy Chief Minister and Finance Minister Jagdish Deora dismissed these allegations outright and says that the government’s financial situation is better. This is why we are getting loans from the market. This is also the prescribed limit of the ratio of the state gross domestic product within the range of three percent.

If the loan and interest are being paid at the scheduled time, then the situation of over draft has not been created even once. No current scheme was discontinued.

Such increasing installation expenditure

• Financial Year-Base (for crores of rupees)
• 2022-23–87,650
• 2023-24–1,05,358
• 2024-25– 1,17,945

(Source: Finance Department)