State Finance, Credit, Cooperatives & Social Indicators of Chhattisgarh — CGPSC GS Paper III Part 1
Weightage: Part 1 of GS Paper III names state finance and budget policy, tax structure and revenue distribution, institutional and non-institutional credit, the cooperative structure, and, for Chhattisgarh, the SC, ST and OBC position, literacy, employment, income distribution, women's empowerment, child labour and rural development. Budget figures change every year, so this chapter teaches the structure and leaves exact numbers to the latest budget document.
1. State finances and the budget
The state budget has three parts. Revenue receipts (taxes, shares, grants, non-tax income), capital receipts (mainly borrowing) and expenditure, split into revenue and capital. The key measures are the revenue deficit (revenue expenditure minus revenue receipts) and the fiscal deficit (total expenditure minus receipts other than borrowing).
Fiscal discipline comes from the state's Fiscal Responsibility and Budget Management (FRBM) Act, which caps the fiscal deficit at a share of gross state domestic product, with the ceiling set nationally at 3 per cent and adjustable within limits agreed with the Centre. Budgets in recent years have targeted a deficit within or near that ceiling. Different sources give different deficit figures for the same year, so check the state's own budget document.
Where the money comes from. In recent budgets, three sources account for most of the revenue receipts:
| Source | What it is | Note |
|---|---|---|
| Own tax revenue | SGST, state excise, stamp duty and registration, motor vehicle tax, electricity duty | Roughly a third of receipts |
| Share in central taxes | The state's share of the divisible pool fixed by the Finance Commission | Also roughly a third; the Commission's share to states has been about 41 per cent |
| Non-tax revenue | Mining royalties, interest and fees | Mining is the largest item, and a distinctive feature of the state |
| Grants-in-aid | Central grants, including for schemes | A smaller share |
The State Finance Commission, provided for in Article 243-I, recommends how state revenues are shared with panchayats and urban bodies.
Where it goes. Agriculture and allied sectors, education, health, roads and energy account for the bulk of sector-wise spending, while salaries, interest and pensions form a large committed portion.
2. Tax structure
After the introduction of the Goods and Services Tax on 1 July 2017, most indirect taxes were merged into GST, with the state getting the SGST and a share of IGST. The state's own independent tax powers now centre on state excise on liquor, stamp duty and registration, motor vehicle tax, electricity duty and taxes on mining and minerals.
Mineral royalties are non-tax revenue, fixed under central law. The District Mineral Foundation funds are separate and are spent for the benefit of mining-affected communities.
3. Cooperatives and credit
The cooperative credit system has three tiers. At the village, Primary Agricultural Credit Societies (PACS), locally called samitis, lend to farmers and also run paddy procurement and fair price shops. At the district, District Central Cooperative Banks finance the societies. At the state, the apex cooperative bank at Raipur sits on top, supported by NABARD refinance.
Other cooperative bodies include the marketing federation (MARKFED) and the minor forest produce federation, which link farmers and gatherers to markets.
Sources of credit.
| Type | Sources | Feature |
|---|---|---|
| Institutional | Cooperative banks, commercial banks, regional rural banks, NABARD refinance, Kisan Credit Cards | Regulated, lower rates, need documents |
| Non-institutional | Moneylenders, traders and commission agents, landlords, relatives | Easy access but often high interest and tied sales |
The policy aim is to bring small and tribal farmers into the institutional network, since dependence on moneylenders is a route to debt and distress sale.
4. Workforce, social groups and income
Occupational structure. A clear majority of the state's workers depend on agriculture, as cultivators or agricultural labourers. The Census 2011 occupational tables are the standard source.
Social groups. In Census 2011, Scheduled Tribes made up about 30.6 per cent of the population and Scheduled Castes about 12.8 per cent. The Census does not count OBCs, so any OBC share is a state or survey estimate. Reservation rules for the three groups have been litigated and amended, so confirm the current position from a live source.
Literacy was 70.28 per cent in 2011, with female literacy about 60 per cent, and tribal districts of the south lag most.
Income distribution and poverty are uneven. The plains around Raipur, Durg and Bilaspur are much better off than the tribal south and north. Use NITI Aayog's multidimensional poverty index and the year of the report when quoting poverty levels.
5. Women's empowerment, child labour and rural development
Women's empowerment. Self-help groups under the state rural livelihood mission (Bihan, the state arm of the National Rural Livelihoods Mission) are the main platform, and women's groups run fair price shops and forest-produce enterprises. The state has also run direct cash-assistance schemes for women, which change with governments.
Child labour. The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, as amended in 2016, bans employing children below 14 in all occupations and bars adolescents from hazardous work. The Right to Education Act, 2009 supports enforcement. Risks in the state include seasonal migration with families, and work in mines, brick kilns and forest-produce collection.
Rural development. The main channels are the rural employment guarantee (currently under a changed national framework, so confirm the name), PMAY-G for rural housing, PMGSY for roads and the livelihood mission. Panchayats and gram sabhas are meant to plan and monitor the works.
Worked example 3.1 (an 8-mark answer, ~100 words). "Describe the cooperative credit structure in Chhattisgarh."
Model answer. Cooperative credit in Chhattisgarh has three tiers. At the village level, Primary Agricultural Credit Societies lend to farmers and also handle paddy procurement and, in many places, fair price shops. District Central Cooperative Banks finance and supervise the societies at the district level, and an apex cooperative bank at Raipur leads the structure with NABARD refinance.
Its strength is reach into villages and its link to procurement. Its weaknesses are overdues, thin capital and uneven governance. Strengthening PACS and computerising them is a central reform goal.
Common traps CGPSC sets here
- Quoting one deficit figure as settled. Sources give different numbers for the same year, so cite the budget document.
- Confusing royalties with taxes. Mineral royalties are non-tax revenue.
- Stating an OBC share from the Census. The Census does not count OBCs.
- Treating PACS as banks. They are village-level societies, and the apex bank is at the top.
- Naming a cash scheme as permanent. Direct-assistance schemes change with governments.
Memory aids
- "Own tax, shared tax, non-tax, grants": the four receipt heads.
- "PACS, DCCB, Apex": the three cooperative tiers.
- "1986 and 2016": the child labour Act and its amendment.
Summary
The state budget rests on its own taxes, a share of central taxes, mining-heavy non-tax revenue and grants, and it is constrained by the FRBM ceiling. Post-GST, the state's own tax powers are excise, stamp duty, motor vehicle tax and electricity duty.
Credit runs through a three-tier cooperative system with PACS at the base, supplemented by commercial and regional rural banks. Most workers are in agriculture, ST and SC shares are large, and women's groups, child-labour law and rural development schemes shape the social agenda.
Exam protocol
- Describe the budget by structure and the year of any figure.
- Keep royalties and taxes separate.
- Pair every social-indicator answer with a state programme.
