With a sluggish growth in tax revenues during April-November 2016, hopes are belied of a rerun of bullish signs in the Odisha economy in 2016, especially after recording of the slowest Gross State Domestic Product (GSDP) growth in country in 2015-16.

Though demonetisation did give some boost as the State’s nontax revenues in November posted the highest-ever growth rate in recent history with a whopping 76 per cent rise, the growth in the nontax revenues in April to November was slower by yards vis-a-vis the same period last fiscal and when seen in the context with sluggish growth in tax collection reflect in capital letters about Odisha economy still on a slow lane in 2016-17.

While the State’s own tax revenues crawled by mere 3.9 per cent during April-November 2016 and, even, dipped by over 14 per cent in November, against the targeted 6.9 per cent growth in Budget 2016-17, the nontax revenues grew stupendously in November to touch a whopping `959 crore vis-a-vis a mere `545 crore in November 2015. But, despite the unusual surge, the total collection during April-November 2016 is still Rs 40 crore less than last year.

However, the total revenue receipts of the State for the period have posted a 6-per cent rise vis-a-vis the same period last year thanks to nearly a 25-per cent rise in grant-in aid receipts from Centre. Similarly, the total receipts (revenue + capital) also posted a 6-per cent rise till November courtesy a 1,220-per cent rise in loan recovery receipts of the State Government.

The biggest fall-out: Revenue surplus of the State shrunk by a whopping around 42 per cent during Apr-Nov 2016 vis-a-vis the same period last year. And worse is the fiscal deficit during the period ballooned by a whopping 1,622 per cent.

The outcome of State finances for the remaining four months looks bleak as the State’s tax collection is to dip further following transitory slowdown in economic activities post demonetisation. Given that nontax revenue has grown by over 11 per cent against targeted 9 per cent in Budget 2016-17, still revenue receipts are going to take a hit. But increased revenue (plan + non-plan) expenditure during the remaining months could shrink revenue surplus to a new low in 2016-17. And if the fiscal deficit grows at this proportion then borrowings would grow for plan spending leading to an escalation of the already higher debt stocks. If a panicked Government cuts down plan expenditure (revenue + capital), development will be the casualty.

The net effect: US Vice-President Joe Biden once said, “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” So, talks of achieving a faster economic growth won’t wash off now; rather, a well-crafted Budget in New Year will spell where Odisha destined for.