Mod 8: Union Budget Allocations, Special Package & Fiscal Federalism

📖 Chapter 1 of 8 🧩 Module 9 of 14 ⏱️ ~2 min read 💡 10 MCQs

Topic Part 1 of 2

Central Financial Support & Infrastructure Outlays:

In the Union Budget 2024-25 and updated allocations through 2025–2026, the central government approved financial support packages totaling Rs 58,900 crore for infrastructure, flood mitigation, and tourism development in Bihar. This funding package was a prominent political issue and strategic milestone for the coalition government.

Sectoral Distribution of Funds:

Road Infrastructure: Central funding was allocated for expressway corridors, including the Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and a two-lane bridge over the River Ganga at Buxar.
Power & Industrial Nodes: Capital outlays supported the development of a 2,400 MW thermal power plant at Pirpainti in Bhagalpur district and industrial node development at Gaya along the Amritsar–Kolkata Industrial Corridor (AKIC).
Flood Mitigation Outlay: Financial assistance of Rs 11,500 crore was designated for flood-management projects along the Kosi, Gandak, and Ganga river networks.

Exam View: Key Takeaways for Competitive Examinations:

Total Support Package: Rs 58,900 crore allocated in the Union Budget for capital projects in Bihar.
Flood Mitigation Fund: Rs 11,500 crore designated for flood protection and irrigation schemes.
Key Corridors: Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and Bodh Gaya–Rajgir–Vaishali–Darbhanga connectivity.

⭐ Key Points

Total Support Package: Rs 58,900 crore allocated in the Union Budget for capital projects in Bihar.
Flood Mitigation Fund: Rs 11,500 crore designated for flood protection and irrigation schemes.
Key Corridors: Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and Bodh Gaya–Rajgir–Vaishali–Darbhanga connectivity.

📌 One-line Q&A

Total Support Package: Rs 58,900 crore allocated in the Union Budget for capital projects in Bihar.
Flood Mitigation Fund: Rs 11,500 crore designated for flood protection and irrigation schemes.
Key Corridors: Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and Bodh Gaya–Rajgir–Vaishali–Darbhanga connectivity.

Questions 10 MCQs

Answer this question, then use Next.

Question 1: What was the total value of infrastructure and developmental financial support announced for Bihar in the Union Budget?

Explanation: The Union Budget provided special financial assistance and infrastructure packages totaling Rs 58,900 crore for Bihar.

Question 2: What amount of financial assistance was allocated for flood-control projects and Kosi river schemes in Bihar in the Union Budget?

Explanation: An estimated financial assistance of Rs 11,500 crore was allocated for flood mitigation and river management in Bihar.

Question 3: At which location in Bhagalpur district was the establishment of a 2,400 MW thermal power plant supported in the budget?

Explanation: A 2,400 MW thermal power plant was approved for Pirpainti in Bhagalpur district.

Question 4: Which major industrial corridor features a mega manufacturing city node at Gaya funded under central allocations?

Explanation: The Gaya industrial node is being developed along the Amritsar–Kolkata Industrial Corridor (AKIC).

Question 5: Which expressway projects in Bihar received priority financial backing under the special central package?

Explanation: Both Patna–Purnia and Buxar–Bhagalpur Expressways received central funding approval.

Question 6: Under the 15th Finance Commission recommendations, what is the vertical tax devolution share allocated to the State of Bihar from the central divisible pool?

Explanation: The 15th Finance Commission recommended a 10.058% share for Bihar from the net divisible tax pool, the second-highest after Uttar Pradesh.

Question 7: Which tourism destination in Bihar was sanctioned special corridors for the Vishnupad Temple and Mahabodhi Temple under the Union Budget?

Explanation: Kashi Vishwanath corridor-style developments were announced for the Vishnupad and Mahabodhi temples in Gaya/Bodh Gaya.

Question 8: Under Article 280 of the Constitution, what primary function does the Finance Commission perform between the Union and states?

Explanation: Article 280 mandates the Finance Commission to recommend horizontal and vertical distribution of divisible taxes.

Question 9: Which ancient university site in Bihar was highlighted for comprehensive tourism development in the budget?

Explanation: Comprehensive tourism promotion was sanctioned for Nalanda, alongside its newly inaugurated university campus.

Question 10: Under the Fiscal Responsibility and Budget Management (FRBM) guidelines, what is the conventional fiscal deficit ceiling for Bihar without incentives?

Explanation: Under normal FRBM norms, states are required to anchor their fiscal deficit at 3.0% of Gross State Domestic Product (GSDP).

Question 1 of 10

One-liners

Write your answer, then submit to see the correct answer.

Total Support Package: Rs 58,900 crore allocated in the Union Budget for capital projects in Bihar.

Rs 58,900 crore allocated in the Union Budget for capital projects in Bihar.

Flood Mitigation Fund: ______

Rs 11,500 crore designated for flood protection and irrigation schemes.

Key Corridors: Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and Bodh Gaya–Rajgir–Vaishali–Darbhanga connectivity.

Patna–Purnia Expressway, Buxar–Bhagalpur Expressway, and Bodh Gaya–Rajgir–Vaishali–Darbhanga connectivity.