Odisha’s economy is all set to grow slower this fiscal year (2017-18). The Gross State Domestic Product (GSDP) at current prices (that includes the inflation rate which is estimated at around 5 per cent) is estimated to clock a lower growth rate of around 8.8 per cent vis-a-vis around 10.8 per cent in 2016-17.
According to the Budget 2017-18 tabled in the State Assembly by Finance Minister Pradip Amat on Monday, the State’s GSDP at current prices for year 2017-18 has been estimated at around Rs 4,124,81 crore. The GSDP at current prices for 2016-17 RE (revised estimates) has been estimated at Rs 3,789,91crore, which has been around 10.8 per cent more than Rs 3,148,87crore worth GSDP in 2015-16.
With slower GSDP growth, the Budget has forecast a slowdown in the growth rate of revenue receipts. The Budget 2017-18 reveals that the gross revenue receipts of the State in 2017-18 would touch around Rs 88,931 crore, which would be a growth of a mere 11 per cent against an achievement of over 16 per cent growth in 2016-17.
The macroeconomic situation, hence, does not look enthusiastic as to fund the State’s development needs. Amat bets on more borrowing; as a consequence, the total debt stock of the State touches an all-time high of around Rs 76,744 crore in 2017-18. The debt stock as a percentage of the GSDP, thus, touched a new high of around 18.61 per cent of GSDP, which is highest proportion since 2011-12. Significantly, the debt stock of the State is consuming around 86 per cent of the revenue receipts against 79 per cent in 2013-14.
Also as forecast earlier, Odisha’s revenue surplus in 2017-18 has shrunk to 1.62 per cent of the GSDP against 1.96 per cent in 2016-17 RE. And the fiscal deficit inched up to 3.5 per cent of the GSDP against 3.2 per cent in 2016-17 RE.
The Budget 2017-18 shows how heavily Odisha depends on the Centre when the State’s share in Central tax devolution and Central grant-in aids together account for a whopping over 59 per cent of the State’s gross revenue receipts against a contribution of around 41 per cent via the State’s own revenue (own tax + nontax). This is when the total Central transfers account for a whopping Rs 52, 631 crore, and the State’s own revenue accounts for mere Rs 36,300 crore.
In this backdrop, the significant fact to note is that the State’s administrative expenditure for year 2017-18 has been estimated at around Rs 47,465 crore, which consumes a whopping 17 per cent of the total expenditure for the year 2017-18.
A look at expenditure on developmental programmes shows that while the expenditure in the State sector schemes in 2017-18 is around Rs 27,493 crore, the schemes under the Central sector and Centrally-sponsored schemes together amount to a whopping Rs 25,307 crore.