MEMORANDUM OF THE FINANCE SECRETARY
TABLE OF CONTENTS
1. Preface ii-iii
2. Introductory Note iv-ix
3. Memorandum of the Finance Secretary 1-18
4. Annex – "A" Ways and Means 19
5. Annex – "B" Financial Statement from Year 2020-2021 to 2025-26 with graphs 20-25
6. Annex – "C" Details of Tax Revenue and Non-Tax Revenue 26
7. Annex – "D" Details of Funds Transferred to Local Bodies as per State Finance Commission's Recommendations 27
8. Annex – "E" Classification of Expenditure Provisions into Revenue and Capital (including Loans and Advances) 28-29
9. Annex – "F" Detailed Plans for Provisions in Economic and Social Sectors (Sub-schemes) 30
10. Annex – "G" Statement showing the object wise expenditure 31-34
Preface
The budget estimates laid before the Vidhan Sabha under Article 202(1) of the Constitution of India has following volumes:-
(i) Budget Estimates, Volume I (Annual Financial Statement): This contains the estimates of Receipts and Expenditure of the State according to the Major Heads of Account prescribed by CAG
(ii) Budget Estimates, Volume II: This contains the detailed estimates of Revenue Receipts and Public Accounts, alongwith explanatory notes on estimates.
(iii) Budget Estimates, Volume III: This contains demands pertaining to different services. Schedule of Demands for Grants and Appropriation relating to the expenditure charged upon the Consolidated Fund of the State are shown in this volume, as recommended by the Governor under Article 203(3) of the Constitution of India.
(iv) Budget Estimates, Volume IV: This contains the Heads of Account in which provisions for different Demands for Grant have been included alongwith the list of New Expenditure for 2025-26.
(v) Budget Estimates, Volume V: This contains the Statements showing committed liabilities of annuity payments and the Guarantees given by the State Government and allotment of Government land on concessional terms.
(vi) Budget Estimates, Volume VI: Gender Budget - This contains the Statements showing provisions made for programmes for welfare and empowerment of women.
(vii) Budget Estimates, Volume VII: Statement on money transferred to Panchayati Raj Institutions and Urban local bodies. A breakup of the funds provided to these institutions is also included .
(viii) Budget Estimates, Volume VIII: Statement of provisions made for farmer's welfare, agriculture and allied activities.
(ix) Budget Estimates, Volume IX– This volume provides a departmental break-up of provisions for schemes benefiting Scheduled Castes and Scheduled Tribes, both directly and indirectly. Proposed expenditures for plans related to departments such as Commercial Tax, Revenue, Transport, Minerals, and Religious Trusts, as well as departments related to General Administration, Finance, Home, Jail and Justice Administration, are not included in this volume, as they are not directly associated with the socio-economic upliftment of these groups.
(x) Budget Estimates, Volume X – Child Budget – To focus on children's needs during the formulation and implementation of state government policies/programs, financial provisions made for children under various government programs/schemes are separately recorded in this volume.
Introductory Note
The Annual Financial Statement, laid before the State Legislature in accordance with provision of Article 202 of the Constitution of India, is the Budget of the State Government. This statement covers all the transactions of the State Government during the current financial year i.e. 2024-25 (revised) and estimated transactions for ensuing financial year i.e. 202526.
2. The Annual Financial Statement is prepared according to the major heads of account, prescribed in consultation with the Controller General of Accounts and Comptroller and Auditor General. Transactions under these heads fall either under the Consolidated Fund of the State or in the Public Account of the State. In addition, the State Government also maintains a Contingency Fund, under Article 267(2) of the Constitution for making advances for urgent (unforeseen) expenditure, which are recouped to the Fund by debiting the Consolidated Fund after obtaining sanction of the Legislature for such expenditure.
3. The receipts and expenditure of the Government fall under one of the Major Heads either in the Consolidated Fund or the Public Account in accordance with the prescribed rules of classification. There are two main divisions in the Consolidated Fund in accordance with provisions of Article 202, viz., Revenue and Capital, which comprise sections for receipts and expenditure, public debt and loans & advances. Within each of these sections, the transactions are grouped into sectors like General Services, Social Services etc., under which specific functions or services are grouped. The sectors are sub-divided into major heads of accounts. Major Heads
generally correspond to the functions of Government, such as Agriculture, Forest etc. Programmes undertaken to achieve the objectives of the functions are identified under minor heads subordinate to each major head.
4. All revenues raised, loans taken and money received by the Government in repayment of loans are credited to the Consolidated Fund and these sums can be appropriated from the Fund only in accordance with law and for the purposes and in the manner provided in the Constitution. Government expenditure, including expenditure on loans and advances by the Government and the repayment of loans and Ways and Means Advances, is met out of the Consolidated Fund. The estimates of expenditure show separately the sums required to meet expenditure which the Constitution has "Charged" upon the Consolidated Fund and the sums required to meet other expenditure. The estimates also distinguish expenditure on Revenue Account from other expenditure. Other expenditure covers outlays, Loans given by Government and expenditure on the repayment of loans and Ways and Means Advances.
5. The estimates of expenditure to be met from the Consolidated Fund are presented to the Vidhan Sabha in the form of Demands for Grants, except such expenditure which is "Charged" upon the Consolidated Fund and, in consequence, does not require a vote of the legislature. These demands generally cover the requirements of each individual administrative service or department. Except in special circumstances, a demand does not cover more than one department. The "Charged" expenditure under any head for which there is a voted demand is included in that demand, but shown separately and is, as explained above, not presented for vote. Where
expenditure is wholly charged for e.g. the repayment of the Public Debt, a separate appropriation is sought.
6. Within each Demand, the detailed estimates are arranged by suitable sub-heads and detailed heads, which indicate the activities and nature of expenditure included in the Demand. So long as the total Demand is not exceeded, Government (and authorities subordinate to them to whom powers may be delegated) can meet excess under one sub-head from savings in another except that excess in "Charged" expenditure cannot be met from saving under "Voted" head and vice-versa.
7. A special feature of the budget is the supporting notes added to each Demand printed in Volume-III which explain the major/minor headwise provisions made under that Demand.
8. It is important to mention here that the total of all the Demands relating to major heads and the "Charged" expenditure provided under that head may not be equal to the total shown in annual financial statement. This is because certain recoveries are taken in the accounts as reduction of expenditure, while in the Demands (which when passed provide the authority for incurring the particular item of expenditure) these recoveries are not taken into account. These recoveries mostly relate to interdepartmental adjustments or recoveries from other Governments, ad hoc funds etc.
9. After the Demands have been voted by the Vidhan Sabha, the sums required to meet the grants so voted, and the expenditure "Charged" on the Consolidated Fund and included in the annual financial statement
presented to the Legislature, are withdrawn from the Consolidated Fund under the authority of an Appropriation Act passed by the Legislature.
10. All public money, not relating to the Consolidated Fund, received by or on behalf of the Government are credited to the Public Account. For payments out of the Public Account, no Demand is required to be presented to the Legislature and requirements are met from time to time as they arise. These payments are largely of the nature of banking transactions. State Provident Funds, Depreciation and other Reserve Funds of Government Departments, ad hoc funds created by the Government by appropriation from revenue or otherwise, miscellaneous deposits and remittances, etc. are included in the Public Account. It is broadly correct to say that none of the account balances in the Public Account belongs to the Government. These liabilities have to be paid back at some time or the other to the public (as in case of State Provident Funds) or to be utilized by the Government in an agreed manner, as in the case of ad-hoc funds set up for special purpose. It may be added that the approval of Legislature is necessary to any appropriation from revenue to create a fund and, unless the allocation thus funded are made over to corporate bodies with separate legal status of their own, similar approval is required for incurring subsequent expenditure from such funds. When an allocation is transferred to any such fund, it is shown as expenditure in the estimates of the year in which the transfer is made. Expenditure met from these funds is similarly shown in the estimate of the years in which it is incurred, but an equivalent allocation is transferred from the fund to meet this expenditure. Legislative
control is thus secured on both the creation of such funds and the utilisation of balances held in them.
a. Under the public accounts, specific purpose funds are created for programs for which revenue receipts identified by the State government for these specific purposes/programs or specifically imposed levies/taxes are deposited. These reserve funds are created under acts passed by the Assembly and are operated according to the rules issued under the acts. Disaster relief, energy development fund, rural development fund, etc. are reserve funds.
b. Receipts from reserve funds in the previous financial year, which were deposited in the consolidated fund, are transferred to the public accounts fund by appropriating them in the appropriate expenditure head of the consolidated fund for the next financial year.
c. Expenditures that can be made from reserve funds are adjusted with the provisions made for this purpose in the consolidated fund before the end of the financial year, while ensuring that the reserve fund is continuously maintained.
d. Expenditures made from reserve funds during the financial year are shown in the appropriate expenditure head of the consolidated fund as recoveries (negative entry).
e. In this way, the Assembly's control over the creation of such funds and the use of the resources held in them is ensured.
11. All the expenditure in control of State Government are not reflected in Budget Estimates due to the fact that the expenditure by rural and urban local bodies, public sector undertakings / boards are not included in the Consolidated Fund / Public Account of the State Government. Accounts of PSUs / Boards are separately placed before the Assembly. The Budget documents of the State Government understate the receipt and expenditure to this extent.
12. Explanatory notes with figures on important points are given below:-
(1) Summary of the Budget: The following details represent the accounts for the year 2023-2024, the budget estimates for the year 2024-2025, the revised estimates, and the budget estimates for the year 2025-2026.
(Unless otherwise stated, figures are in ₹ crores) Minor discrepancies may occur due to rounding off the final figures included in this document and the tables in the Finance Secretary's memorandum.
# According to the financial accounts received from the Comptroller and Auditor General of India for the year 2023-24.
@ According to the Government of India’s budget for 2025-26.
+ Based on the communication from the Directorate of Economic and Statistics, letter number 1258/2024/आस
/2-र आ dated 28-3-2024.
++ According to the Government of India, Ministry of Finance (Expenditure Department) letter number 40(1)/PF-S/2025-26 dated 30-3-2024.
+++ Based on the information received from the Planning, Economic and Statistics Department.
++++ Computed according to the formula suggested by the 15th Finance Commission. The actual estimate of GSDP may differ from this.
* 2.33% is against the general borrowing limit is 3% + allocation under the Government of India's scheme (Special Assistance to States for Capital Investment - SASCI), amounting to ₹12,636 crores (0.93% of GSDP), which is not included within the FRBM limit.
** 3.5% as per recommendations of the 15th Finance Commission and permission obtained from the Government of India + including Rs. 9500 as Capital Investment from the Government of India to the States as Special Assistance.
*** The general borrowing limit is 3%, and under SASCI, the estimated amount is ₹12,300 crores (0.82% of GSDP) + According to the directives of the Government of India, the unused borrowing limit from the year 2021-22 to 2023-24 is 0.33% of GSDP, which is not included within the FRBM limit.
****
The general borrowing limit is 3%, and under SASCI, the estimated amount is ₹11,000 crores (0.65% of GSDP) + According to the directives of the Government of India, the unused loan limit from the year 2021-22 to 2023-24 is 1.01% of GSDP, which is not included within the FRBM limit.
(2) Consolidated Fund, Public Accounts, and Contingency Fund
The summary of transactions related to the consolidated fund, public accounts, and contingency fund for the following years is as follows -
B. Consolidated Fund
1.
7.
8.
9.
D. Closing Balance (A9)
According to the financial accounts for the year 2023-24 received from the Comptroller and Auditor General of India.
(3) Revenue Receipts
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
1. Share in Central Taxes - In the interim budget for the year 2024-25 presented by the Government of India (in February 2024), an estimate of ₹95,752.96 crores was made for the State's share of Central taxes. Based on this, provisions were made in the State budget estimates for the year 2024-25 presented on July 3, 2024. On July 23, 2024, the Central government presented an estimate of ₹97,906.09 crores for the State's share of Central taxes for the year 2024-25. In February 2025, the revised estimate for the year 2024-25 was increased to ₹1,01,020.45 crores. Thus, the revised estimate is ₹5,267.49 crores higher than the budget estimate for 2024-25.
2. State Taxes - The revised estimate for the State's own tax revenue is ₹5,980.69 crores less compared to the budget estimate. This shortfall is mainly due to decreases in State GST, VAT, stamp and registration fees, State excise duty, energy, and vehicle taxes. The compensation received from the Central government under State GST has been classified under central assistance grants.
3. Non-Tax Revenue - The increase in the revised estimate is primarily due to higher-than-expected revenues from interest earnings, various general services, sports, arts and culture, and agricultural activities.
4. Grant-in-aid from Centre - A decrease of ₹1,914.08 crores is reflected in Central assistance grants due to the likelihood of receiving less grant than expected for Central sector/Centrally Sponsored schemes.
(b) Budget Estimates 2025-26
(Note: The figures indicate increases/decreases compared to the revised estimates for 2024-25.)
1. Share in Central Taxes - Based on the data from the Government of India's first full budget for the year 2025-26 (presented on February 1, 2025), the budget estimate for the financial year 202526 is projected to be ₹1,11,662 crores. This represents an increase of approximately 10.5% compared to the revised estimate.
2. State Taxes - The State's own tax revenue is estimated to be ₹1,09,157 crores. This represents an increase of approximately 14% compared to the revised estimate. The main reason for this increase is the anticipated higher annual growth rate in State Goods and Services Tax (SGST), VAT on sales and trade, State excise duty, stamp and registration fees, vehicle tax, and electricity duty.
3. Non-Tax Revenue - The State's non-tax revenue is estimated to be ₹21,399 crores. This represents a decrease of approximately 2% compared to the revised estimate. This decrease is mainly due to lower revenue estimates in various general services, agricultural activities, and minor and medium irrigation.
4. Grants-in-Aid from Centre - A budget estimate of ₹48,661 crores has been set for the financial year 2025-26. This represents an increase of approximately 13% compared to the revised estimate. The outstanding compensation for losses in the State's own tax revenue (State GST) under the Goods and Services Tax (GST) system is also included in this head.
(4) Revenue Expenditure –
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
The revised estimate is ₹661 crores less than the budget estimate. Given the anticipated decrease of approximately ₹1,335 crores in revenue receipts, the revised estimate for revenue expenditure has also been reduced due to lower expected spending on certain schemes.
(b) Budget Estimates 2025-26:
(Note: The figures indicate increases/decreases compared to the revised estimates for 2024-25)
The budget estimate has been increased by approximately 11%. This increase is primarily due to budget estimates for pensions, interest payments, personnel services and benefits, social security and welfare,
health, agriculture sector, animal husbandry, forestry, food storage, rural and small industries, and state sponsored schemes.
(5) Revenue Surplus
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
For the year 2024-25, the budget estimate for revenue surplus was ₹1,700 crores, whereas the revised estimate anticipates a revenue surplus of ₹1,026 crores. The revised estimate reflects a decrease in revenue receipts and effective control over revenue expenditure, resulting in a lower revenue surplus compared to the budget estimate.
(b) Budget Estimates 2025-26:
The economic growth of the state remained stable in the financial year 2024-25. If this growth trend continues, the expected revenue receipts for the year 2025-26 are anticipated to be higher than those of 2024-25. It is essential to make sufficient provisions for welfare schemes in revenue expenditure. Under these circumstances, the revenue surplus is estimated
to be ₹618 crores, which is expected to be used for the state's capital investment.
EffectiveRevenueSurplus: This will include those revenue expenditures that are utilized for the creation of capital assets in the state. For the year 2025-26, this is being reported separately. An amount of ₹5,210 crores is included as a grant for the creation of capital assets. Therefore, the effective revenue surplus for the year 2025-26 is estimated to be ₹5,828 crores.
(6) Capital Expenditure
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
The revised estimate for capital expenditure is higher than the budget estimate. The main reason for this is the provision for the takenover of loans given to electricity distribution companies under the UDAY scheme as equity, along with no reduction in the capital resources received by the state. A growth of approximately 15% in capital expenditure is estimated compared to the year 2023-24. The revised estimate includes an additional ₹12,300 crores in resources received by the state under the Government of India's scheme for capital investment, which will be used for capital works.
(b) Budget Estimates 2025-26:
(Note: The figures indicate increases/decreases compared to the revised budget estimates for 2024-25.)
The budget estimate for capital expenditure for 2025-26 shows a 27% increase compared to the revised estimate for 2024-25. This increase is primarily due to provisions for the takenover of loans given to electricity distribution companies under the UDAY scheme, as well as increases in allocations for health, roads, irrigation, drinking water, public works, urban development, tribal affairs, other rural development programs, and forest areas. To boost the growth rate of the state's economy, it is essential to increase capital investments. Additionally, the state is expected to receive ₹11,000 crores in additional resources under the Special Assistance to State for Capital Investment (SASCI) which will be used for capital works.
Effective Capital Expenditure: This will include those revenue expenditures that are utilized for the creation of capital assets in the state. For the year 2025-26, this is being reported separately. An amount of ₹5,210 crores is included as a grant for the creation of capital assets. Therefore, the effective capital expenditure for the year 2025-26 is estimated to be ₹90,286 crores.
(7) Public Debt
1. Receipts
2. Disbursement
Receipts and Disbursements:
In the revised estimate for the year 2024-25, the expected public debt receipts are anticipated to be lower than the budget estimate. The primary reason for this is the non-utilization of additional borrowing limit of 0.5% of the Gross State Domestic Product (GSDP) for reforms in the energy sector. Additionally, the preliminary GSDP estimates notified by the Planning, Economic, and Statistics Department indicate a reduction in GSDP estimates as per the letter received from the Government of India's Ministry of Finance (Department of Expenditure) numbered 40(1)/ PF-S/2025-26 dated March 30, 2024. The public debt receipts also include funds received under the Government of India's Scheme Special Assistance to States for Capital Investment (SASCI), as well as the unused borrowing limit by the state from 2021-22 to 2023-24, which is not counted within the FRBM limits.
The budget estimate for the year 2025-26 is likely to show an increase in public debt compared to the revised estimate for 2024-25. This increase is primarily due to an expected rise in the gross state domestic product. With an increase in GSDP, the Annual Borrowing Ceiling of the State also increases. The GSDP for the Financial Year 2025-26 is calculated according to the formula suggested by the 15th Finance Commission. There is a possibility of changes in the GSDP figures based on the central government's decisions. Provisions related to debt repayment are according to the prescribed program.
(8) Recovery of Loans and Advances by the State Administration
Receipts
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
The revised estimate for receipts shows an increase compared to the budget estimate for the year 2024-25, primarily due to provisions for the takeover of loans as equity given to electricity distribution companies under the UDAY scheme as equity.
(b) Budget Estimates 2025-26:
According to the budget estimate, receipts are projected to be ₹5,552 crores. The budget estimate shows higher receipts under loan and advance recovery compared to the revised estimate, mainly due to provisions for the takeover of loans as equity given to electricity distribution companies under the UDAY scheme as equity.
Disbursements
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
The primary reason for the decrease in the revised estimate for 202425 compared to the budget estimate is the reduction in loans for urban development, electricity projects, and various general services.
(b) Budget Estimates 2025-26:
An increase in disbursements is anticipated in the budget estimate for 2025-26 compared to the revised estimate for 2024-25. This increase is mainly due to the rise in budget estimates for loans for various general services, urban development, and electricity projects.
(9) Miscellaneous Capital Receipts
₹3.77 crore of receipts are estimated in budget estimate for 2025-26.
(10) Public Accounts
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
A decrease in capital receipts is anticipated in the revised estimate for the year 2024-25.
(b) Budget Estimates 2025-26:
(The increase/decrease in figures is in comparison to the revised estimate for the year 2024-25.)
An increase in capital receipts is anticipated.
(11) Closing Balance
(a) Reasons for Variations between the Budget Estimates 2024-25 and Revised Estimates 2024-25:
The revised estimate for 2024-25 shows a decrease compared to the budget estimate for 2024-25.
(b) Budget Estimates 2025-26:
(The increase/decrease in figures is in comparison to the revised estimate for the year 2024-25.)
An increase is anticipated in the budget estimate for 2025-26 compared to the revised estimate for 2024-25.
(12) New Expenditure for the Year 2025-26
(13) Detailed Transactions Under Various Sectors of Accounts for 2025-26
(14)
Statement of Sources and Utilisation of Funds
(15) Data of Special Significance in the Social and Economic Sectors
(17) Debt Position of State
(18) Details of Outstanding Debt
For detailed information, the necessary appendices and sections have been attached. The details of guarantees provided by the state government, allocation of government land under concessional terms, guarantees being given for higher education loans and annuities are included in Volume 5.
Manish Rastogi
Date: 12 March 2025 Principal Secretary Finance Department Government of Madhya Pradesh
Bhopal
Ways and Means
Revenue Surplus as % of GSDP
Fiscal Deficit as % of GSDP
Interest Payments as % of Revenue Receipts
Debt
as
% of GSDP
(Except Reserved and Deposited Funds)
Share in Central Tax and State Tax
Grant-in-Aid from Centre
Rs in Crore
Revenue Expenditure
Capital Outlay as % of GSDP
Details of Funds Transferred to Local Bodies as per State Finance Commission's Recommendations Grants-in-aid to
Note: The details of funds allocated to each body are provided in Section 7 of the budget literature.
3
Contract Services and Supplies
37. Fairs, Festivals, and Exhibitions
4 Grants and Others
41.Scholarships
43.Contributions
58.
Creation of Capital Assets and Other Capital Expenditures
