The first budget of Naveen Patnaik government in its record fourth term, as expected, is focused on the promises that ensured a BJD clean sweep of the polls in Odisha. This blatantly populist agenda, however, is poised to inflict heavy cost on the state economy. Loan burden is set to touch the Rs 51,000-crore mark by the end of 2014-15. As per the annual budget, the state government would incur a loan of Rs 11,695.72 crore during 2014-15, the highest borrowing in the last 13 years. The budget size has also been increased substantially due to higher allocations on new and existing schemes and programmes, going up to Rs 80,139 crore from Rs 60,303 in the last fiscal. For example, the allocation for flagship programme “Mo Kudia”, for providing housing to all, has been enhanced by Rs 230 crore while allocation of Rs 150 crore has been made for newly launched scheme Mukhya Mantri Sadak Yojana.
The burden on the state exchequer is already pressing. The hurry of the BJD government in implementing promises made in its poll manifesto along with ongoing schemes will only add to the weight of increasing expenditure that is going far beyond the revenue position. Revenue generation has been missing all targets in the past few years. Annual growth rate of revenue receipts, pointed out in the latest CAG report, has plunged to 9.11 per cent in 2012-13 from 21 per cent in 2011-12. Revenue expenditure, on the other hand, has risen to 87 per cent of the total expenses, up by 10 per cent over 2011-12. Tax and non-tax revenue collections during 2014-15 have been estimated at Rs 27,887 crore. Last year, the tax revenue was less than Rs17,605 crore target and realisation was Rs 16,891 crore. Further, flow of investments into Odisha has almost come down to a trickle and industrial growth is dipping fast.
The government should have been more prudent in managing the economy that had recovered to a large extent in the last decade. It should move systematically with the schemes on the basis of their utilisation rather than going all in which will further bleed the coffers.