Economy and State Budget of Haryana: Facts and Articles

Haryana was carved out of Punjab on 1 November 1966 and in six decades has become one of India's most industrialised and highest income states, with a per capita income among the highest of the larger states. Its economy rests on three legs: a Green Revolution farm belt in the north and west, a manufacturing and services corridor in the National Capital Region around Gurugram and Faridabad, and a growing services sector that now contributes the largest share of the state's output. This note explains that structure and then the state budget, which rests on Articles 202 to 207 of the Constitution and on the state's own fiscal responsibility law.

The shape of the state's economy

By share of gross state value added, the services sector is the largest in Haryana, followed by industry and then agriculture, though agriculture still employs a much larger part of the workforce than its share of output. The Department of Economic and Statistical Analysis prepares the state's economic survey and the estimates of gross state domestic product that the budget is built on. Haryana's advantage is location: a large part of the state lies in the National Capital Region, which brings road and air connectivity, a market and corporate offices, so the districts of Gurugram, Faridabad, Sonipat and Jhajjar contribute a disproportionate share of state revenue.

Agriculture and allied sectors

Haryana was one of the two states where the Green Revolution took root in the late 1960s, and wheat and rice remain its principal crops. It is among the leading contributors of wheat and rice to the central pool, which is why its procurement machinery is large: the Haryana State Agricultural Marketing Board runs the regulated mandis, and HAFED, the state's apex cooperative supply and marketing federation set up after the state was formed in 1966, procures and processes foodgrains. Sugarcane, mustard, bajra, cotton and vegetables are the other important crops. Animal husbandry is strong, with the Murrah buffalo as the state's famous breed and high per capita milk availability. Two state measures are asked about often: the Bhavantar Bharpai Yojana of 2018, which pays growers of notified vegetables the difference when the market price falls below a protected price, and Mera Pani Meri Virasat of 2020, which gives an incentive to farmers who shift land out of paddy to save groundwater. The Meri Fasal Mera Byora portal registers crops for procurement and compensation.

Industry and services

Haryana is a manufacturing state of national importance, especially in automobiles. Passenger car plants at Gurugram and Manesar, tractor and engineering works at Faridabad and two-wheeler plants in the Gurugram and Dharuhera belt make the state a large producer of cars, tractors and motorcycles.

• Gurugram: information technology, business process management, corporate offices and real estate.
• Faridabad: engineering goods, tractors, auto parts and tyres.
• Panipat: handloom and textile furnishings, known as the city of weavers, and the Panipat refinery of Indian Oil, commissioned in 1998.
• Yamunanagar: plywood and paper; Hisar: steel and stainless steel; Bahadurgarh: footwear and ceramics; Rewari: brassware.

Industrial estates and model industrial townships are developed by the Haryana State Industrial and Infrastructure Development Corporation, set up in 1967, and the state's industrial policy framework is the Haryana Enterprises and Employment Policy of 2020. Infrastructure that shapes the economy includes the Kundli-Manesar-Palwal Expressway of about 136 kilometres, opened fully in 2018 as the western peripheral ring around Delhi, the Delhi-Mumbai Expressway crossing the state's south, and the Haryana Orbital Rail Corridor planned between Palwal and Sonipat.

The state budget and the Constitution

The budget of Haryana is the Annual Financial Statement of the state, prepared by the Finance Department and presented in the Vidhan Sabha by the Finance Minister before the financial year begins on 1 April.

Receipts, expenditure and fiscal rules

Haryana's receipts are of two kinds. Own tax revenue comes from state goods and services tax, excise duty on liquor, stamp duty and registration charges, tax on vehicles and electricity duty, and Haryana's own tax effort is among the stronger ones in the country. To this are added own non-tax revenue, the state's share of central taxes as recommended by the Finance Commission under Article 280, and central grants. Expenditure is read as revenue expenditure, mainly salaries, pensions, interest and subsidies, and capital outlay, which creates assets such as roads, canals and buildings. The Haryana Fiscal Responsibility and Budget Management Act of 2005 binds the state to keep the fiscal deficit within about 3 per cent of gross state domestic product and to contain its debt, with relaxations allowed when the Centre permits extra borrowing. After the year ends the Comptroller and Auditor General audits the accounts and the report goes to the Public Accounts Committee of the Vidhan Sabha, which closes the accountability loop that began with the budget speech.