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Hike in central tax share boosts Haryana budget
71.25% of outlay for revenue expenditure on salaries, pensions, social security schemes and freebies; 28.75% marked for repayment of debt, capex
Bolstered by an anticipated fiscal gain which would jack up its share in central taxes by ₹5,547.14 crore in 2026-27 financial year, Haryana chief minister Nayab Saini on Monday proposed a budget outlay of ₹2.23 lakh crore. The CM, who also holds the finance portfolio, presented his second successive budget in the state assembly on Monday. About 34% of the budget will be funded through borrowing and about 29% of the expenditure will be consumed by debt servicing.
While ₹2,23,658.17 crore outlay represented a 9.09% increase over ₹2,05,017.29 crore budget estimates proposed by Saini in his maiden budget presented on March 17, 2025, the CM though pegged the growth at 10.28% by comparing it with the lower 2025-26 revised estimates of ₹2,02,816.66 crore.
As per the budget documents, a lion’s share of 71.25% will be consumed by revenue expenditure ( ₹1,59,351.37 crore) on salaries, pensions, social security schemes and freebies like subsidised LPG cylinder, rural electrification subsidy, and unconditional transfer schemes like Lado Lakshmi Yojana, the allocation for which was increased from ₹5,000 crore in 2025-26 fiscal to ₹6,500 crore in 2026-27.
While the remaining 28.75% of the outlay — ₹64,306.80 crore has been categorised as capital expenditure, it included spending ₹36,101.68 crore on repayment of debt and ₹6,448.40 crore as loans (advances). Thus, the capital outlay effectively will be ₹21,756.72 crore which is about 34% higher than ₹16,164.11 crore proposed by Saini in 2025-26 budget estimates. However, the revised capital outlay stood at comparatively lower at ₹15,656.46 crore with the state government spending about ₹12,100 crore as capital expenditure till January 2026. Capital expenditure refers to the government spendings on creation of long-term assets – infrastructure projects, roads, bridges, educational and healthcare facilities and undertaking development projects and plays a crucial role in driving and sustaining economic growth.
“The fiscal deficit is estimated at ₹40,293.17 crore, which is 2.65% of GSDP. The revenue deficit is 0.87% and the effective revenue deficit is 0.41%,” Saini told the House.
The chief minister said while projecting receipts and expenditure for 2026-27, recommendations of the 16th Finance Commission have been followed.
“Haryana’s share in central taxes has been assumed at ₹20,772.32 crore as per recommendations of the Commission. The revenue expenditure has been projected to be contained to the bare minimum level. Power is a critical input for the overall development of the economy. The committed budgetary support to power utilities is being given in the form of equity and rural electrification (RE) subsidy. The total budgetary support of ₹6,868 crore has been provided to energy sector in 2026-27 budget estimates, including the provision of ₹5,640 crore for RE subsidy. The state government continues to extend budgetary support to the rural and urban local bodies to tide over their financial problems and to enable them to be effective units of delivery of services at the local level,’’ as per budget documents.
Finance department officials said that substantially higher devolution for the state from the divisible pool of central taxes is certain to give boost to capital spendings.
The CM said that as per the recommendations of the 16th Finance Commission, ₹2,247.92 crore ( ₹1,062.00 crore for PRIs and ₹1,185.92 crore for urban local bodies) has been provided for 2026-27 fiscal.
Finance department officials said the revenue deficit as percentage of GSDP is estimated to be 0.87% in 2026-27 budget estimates and the fiscal deficit as percentage of GSDP is projected at 2.65% which is within the stipulated limit of 3% of GSDP prescribed by the 16th Finance Commission.
Similarly, in BE 2026-27, the outstanding debt, as a percentage of GSDP is estimated at 25.68% which is also within the stipulated limit of 32.50% recommended by the commission, they said.
