BHUBANESWAR: The Cabinet and Council of Ministers on Tuesday approved the State Budget with a total outlay of about Rs 1.70 lakh crore for 2021-22 financial year. The proposed budget size will be more than the outlay of Rs 1.5 lakh crore in the previous financial year. However, as the State would be hit by drastic reduction of share in Central taxes by about Rs 10,840 crore, the government will have to resort to more borrowing to balance the loss of revenue to the exchequer.
The Cabinet meeting presided over Chief Minister Naveen Patnaik on Tuesday approved a proposal for amendment to the Odisha Fiscal Responsibility and Budget Management Act, 2005 to enable the State Government to meet higher resources requirement for Covid-19 management, maintain the standards of service delivery to the public, compensate the shortfall arising out of GST implementation and maintain the level capital expenditure on infrastructure projects in the State.
The proposed amendment envisages to carry forward unutilised borrowing ceilings availed during the 2020-21 to the next financial year. Besides, it aims to avail special borrowing under the special window towards the GST compensation shortfall over the above relaxation along with additional funds in the form of 50 year interest free loan under the ‘Scheme for Special Assistance to States’ for capital expenditure.
After the amendment, the State government will be able to avail additional borrowing of two per cent of the GSDP during 2020-21 which can be extended to the next financial year. This includes borrowing of one per cent of fiscal deficit and the balance one per cent depending on implementation of four sectoral reforms.
The sectoral reforms include, implementation of one nation one ration card system, ease of doing business reforms, urban local body or utility reforms and power sector reforms.