Notwithstanding the challenging scenario staring at the State where the buoyancy in the State’s own tax revenue has shown some sluggishness, it seems Finance Minister Pradeep Amat will not sacrifice the imperatives of economic growth and development with a social face. Official sources confirmed that the coming Budget would boldly go in for higher capital outlay in order to fast-track the relatively slower GSDP growth since 2013-14 purely on the assumption of better Indian economy in 2015-16, especially so after predictions by both World bank and IMF. Finance Commission bonanza and increased royalty rate will provide the necessary cushion, added sources.
Sources in Finance Department further informed that, though there would be no additional tax burden on the ‘aam admi’ some tinkering in tax structures could be done to maximise the State’s own revenue. In order to avoid inflationary Budget tag, recently the Government has cleverly raised the VAT on petroleum products that contributes one-fourth to the tax kitty. Indications are that the Government eyes on high-end commodities/services and foreign, branded liquor to shape up its revenues.
Despite all this, the State will have to borrow more to fund productive economic activities thanks to overall economic slowdown. However, this will put pressure on the debt stock that was already heading north since 2014-15. The RBI recently observed that growth of GSDP cannot be qualified as qualitative if proportion of debt stock rises with rise in GSDP.
But the State has its compulsions. If RBI’s 2013-14 empirical analysis based on the last 2011 Human Development Index (HDI) is looked into, then despite an over 5-times increase in per capita social sector spending Odisha carved a dubious niche nationally with growth of its human development parameters taking a negative dive. The State notched up the highest (-1.5 per cent) de-growth nationally followed by Madhya Pradesh and Uttar Pradesh.
The RBI assumes some plausible progress by 2015 as the social services expenditure was pegged at around Rs290 billion last fiscal. The report outlined Kerala and Gujarat as top performers. A comparative analysis nails the cause. Around 83 per cent or a whopping 3.32 crore live in villages in Odisha. Poor human development outcome seems co-related to lackadaisical thrust on rural development.
Per capita spending on rural development in Odisha is mere Rs1,409 against Rs6,152 in Gujarat. Even Chhattisgarh’s estimated rural per capita spending in 2014-15 was Rs2,936. When Odisha earmarked Rs4,678 crore for rural development, Chhattisgarh allocated Rs5,578 crore. With a six per cent unemployment rate, the 14-15 Budget for rural employment in Odisha stood at Rs3,336 crore against Rs4, 298 crore in Gujarat. Chhattisgarh allocated Rs2,752 crore for rural employment though its rural population is only 1.9 crore. Rural employment’s centrality gets reflected significantly by 2011 Census.
Rural Odisha has over 43 per cent workers who could get work for around 6 months only. In contrast, mere 24 per cent labour force in rural Gujarat could avail work for around 6 months. This shows employment is not available round the year in Odisha to a vast populace unlike Gujarat. The effect then on better HDI outcome is: In Odisha out of 44 lakh enrolments at primary-level, only around 7 lakh could complete their matriculation. This drop-in get reflected in de-growth of HDI outcomes despite increased funding on education.