BHUBANESWAR: In a major fiscal reform aimed at steering Odisha towards achieving its vision of a developed state by 2036, the state government has decided to prepare the annual budget in a multi-year ceiling format, enabling departments to plan and execute long-term projects with assured fund predictability.
In a circular issued on Tuesday, the Finance department has made it clear that departments will be given spending limits not only for the budget year but also for the subsequent two years to ensure continuity in planning and implementation.
Although preparation of the 2026-27 annual budget will follow the same principles adopted for 2025-26, including macro-fiscal forecasting and early communication of departmental expenditure limits, departments will have to rigorously scrutinise and prioritise proposals within the prescribed ceilings.
“Flexibility will be allowed within broad expenditure categories, but proposals exceeding ceilings will not be entertained. The departments will also be communicated with a multi-year ceiling for next three years - budget year (Y), Y+1 and Y+2, so that they would have predictability in fund flow for multi-year project planning,” the circular read.
The state government has set an ambitious target to transform Odisha into a USD 500-billion economy by 2036 and USD 1.5 trillion by 2047, 15 times its current economic size, backed by robust job creation, improved human development indicators and global competitiveness in tourism, healthcare, manufacturing and green energy.
Despite weak external demand, geo-economic fragmentation and protracted geopolitical tensions, the state economy is poised to grow at 8 per cent in real terms in 2026-27. Considering the revenue receipt trend in recent times, total revenue receipt of the state is expected to grow by about 10 per cent in 2026-27 over the current year’s revised estimates.
However, the government will continue with data-driven and structured processes for the budget, including department-wise ceilings split into administrative and programme expenditure, scrutiny of manpower and salary data, publication of a fiscal strategy paper outlining medium-term projections.
Principal secretary of Finance Sanjeeb Kumar Mishra has suggested that allocation for centrally-sponsored schemes and central sector schemes be proposed considering the likely level of central assistance to be received for the schemes for the budget year within the overall ceiling communicated for the sectors.
“Convergence of extra-budgetary resources to budgetary resources and between budgetary resources should be made a part of the budgetary exercise to ensure productive output,” he advised.
The departments have been asked to submit estimates by December 20. The budget for 2026-27 will be presented in the state Assembly after consultations and finalisation in February next year.