BHUBANESWAR: The World Bank has already projected an above three per cent contraction for Indian economy which may push a large population further below poverty line. Thanks to the Covid pandemic, no state is going to be insulated from the impact of its economic cost, let alone Odisha.
For the Naveen Patnaik Government, the task is cut out as it begins to look further ahead and beyond the global health crisis. The signs are tell-tale.
The revenues are already hit and more than half a million migrant workers back home from different states have begun looking up to the Government for livelihood.
As it is, the State is going to face widespread loss of livelihood and poverty estimates will change for sure.
To reboot the economy, the Government will have to spend more. But, where would the revenues come from? With a large bouquet of wel fare schemes to operate, the State Government may be forced to re-do its economics.
Or rather, the mathematics parts of economics. There are over 65 schemes - including some of its flagship initiatives – that may come under review. Desperate times require desperate measures and hence, harsh decisions will have to be taken.
Going by its mood, it might choose to be wise - drop a few schemes and focus on good old economics of consolidation.
The sectors that would require continued attention are agriculture and allied sectors which would create more work and jobs. It has to go beyond NREGA.
During its 20 year tenure, the Naveen Patnaik Government has done a fine job with poverty alleviation. From 60.8 per cent in 2004-05, rural poverty declined to 35.7 per cent in 2011-12, when the last estimates were made. However, employment has remained a critical area.
“Between 2011-12 and 2017-18, the total number of employed in the State has dropped from 1.74 crore to 1.56 crore, reporting a 10.6 per cent increase in unemployment. That will be a stressed area for Government and requires increased focus because the pandemic will have exacerbated rural unemployment,” says Dr Sitakanta Panda, Assistant Professor of Economics at IIT, Bhilai.
Covid pandemic: Will Govt curtail existing schemes?
This would mean rural infrastructure may be another sector which will get more focus given its potential for generating jobs.
With revenue resources set to remain dry for the next six months given the virus scare on key economic sectors, challenge will be to walk a tightrope – spend more but maintain fiscal austerity.
The Odisha Government has been lauded for its fiscal discipline but this may not be the time when it can afford any further welfarism.
There is strong likelihood that the Government will re-think the future of a few schemes while remaining committed to areas like health.
Under its 5T Initiatives, health sector remained a focus which helped so far to deal with the Covid challenge whereas some of the bigger and developed states have been found wanting.
Some of its major urban infrastructure projects like heritage plans for Bhubaneswar, Puri and other cities would continue to get the budgetary focus as the Chief Minister has already made his intention clear about it.
Panda says, the Government will have to prioritize on farm and services sectors but since Covid is something which is unlikely to go away soon, it will have to show fiscal prudence.