BHUBANESWAR: All eyes are on Finance Minister Niranjan Pujari who will present the budget for 2021-22 in the Assembly on Monday when the State economy is staring at a contraction of 4.92 percent (pc) due to the Covid-19 pandemic.
The Finance Minister will not only have to present a budget of bigger size than the previous year but also manage the increased allocations to key sectors by resorting to more borrowing. Sectors like health, employment generation, tourism, agriculture and infrastructure development will get extra attention to put the economy back on the rails.
Sources said that the Minister will present a budget of Rs 1.7 lakh crore for 2021-22 against Rs 1.5 lakh crore in 2020-21 with more emphasis on capital investment. Health, agriculture, water resources, creation of rural infrastructure and employment generation will take away a large chunk of the budget resources as a result of which the debt stock of the State is likely to go up considerably. Besides, the beautification and heritage conservation work started in Puri Jagannath temple, Ekamra Kshetra in Bhubaneswar and temples across the State will also eat up a substantial chunk.
As such, the debt burden on Odisha is likely to touch Rs 1.06 lakh crore by the end of the 2020-21 financial year. It is likely to climb up to over Rs 1.35 lakh crore in the next fiscal because of several commitments of the government. The precarious economic situation has been admitted by the State government in its Economic Survey for 2021-22 in which it has maintained that only 49.06 pc of the estimated revenue receipts could be achieved indicating a shortfall of 50.94 pc. The State government has also fallen 42.91 pc short in GST collection by the end of December, 2020.
A similar situation also exists at the Centre. Lower tax receipts at the Central level because of the Covid-19 pandemic also affected the State’s share of union taxes and grants-in-aid. The shortfall will be very difficult to recoup within such a short period of time. The economic survey has put the problem very candidly. “The shortfall in GST revenue could have been neutralised by the GST compensation by the Central government. But here again, the requirement is a 14 pc growth in state GST revenue which is next to impossible this fiscal and the Centre may not have enough funds to award compensation,” it said.
Besides, the decline in vertical share and horizontal share for Odisha in 15th Finance Commission recommendations will also affect the economy there by impacting the budget making. Odisha is likely to lose around Rs 10,000 crore because of the 15th Finance Commission recommendations.
However, there is a silver lining in the gloom. Governor Ganeshi Lal announced in his address to the Assembly on Thursday that the State government has been able to collect revenue of Rs 38,760 crore by the end of January, 2021 through one time settlement schemes which is 7.3 pc more than the previous year.
Chief Minister Naveen Patnaik was also optimistic in his speech in the Assembly on Saturday by announcing that the State’s revenues have increased by 7.3 pc compared to the corresponding period last year and Odisha is in a much better fiscal position compared to many states in the country.
Leader of the Opposition Pradipta Nayak, however, said that drinking water, employment generation, health and road communication will have to be given priority in the budget. Congress whip Tara Prasad Bahinipati said the loan amount will increase because of the precarious finances. However, former Finance minister Sashibhusan Behera said health, education, investment in infrastructure and employment generation are expected to be given priority in the budget.