For the first time, the Odisha Government would go for a Supplementary Budget in the month of September as the Department of Finance has invited proposals from all the departments. Never in the history has it happened as hardly four months have not elapsed in the financial year.
Normally, Supplementary Budget proposals are invited in November and presented in the Winter Session of the State legislative Assembly in December.
However, Finance Secretary TK Pandey has invited proposals for the Supplementary Statement of Expenditure for fiscal 2018-19 by the end of first week of August. This would be presented in the Assembly in September.
Pandey in his letter has stated that Supplementary Expenditure proposals should not be made in a routine manner but should be based on actual needs and should commensurate with the actual spending capacity.
So, the major and high-spending departments would have more resources to spend during the year with an early supplementary funding available with them, officials pointed out. The 2018-19 Annual Budget was formulated with an increase of 12 per cent over that of 2017-18. To finance the Annual Budget, the State’s own revenue was projected to grow at 9.4 per cent and overall revenue at 11.7 per cent.
Justifying an early Supplementary Budget, it has been stated that while the Government is paying salary and pension to its employees and former employees in revised scales as per recommendations of the Seventh Pay Commission from October 1, 2017 and has paid a 40-per cent arrear salary and a 100-per cent arrear pension, this has increased expenditure on account of salary and pension substantially.
Besides, while formulating the Annual Budget, 2018-19, the limit of fiscal deficit of 3.5 per cent of Gross State Domestic Product (GSDP) was fully utilised for financing the deficit.
Accordingly, it would not be possible to make substantive provisions under any unit in absence of an adequate resources backup, pointed out a senior official.
Secondly, in case of a number of Centrally-Sponsored Schemes (CSS), it is noticed that the Government of India’s allocation towards its assistance is being reduced. Accordingly, proposals are to be made for higher allocation from the State share to run various programmes, said the officer.
The reduction of the Central share in the CSS has come as a huge pressure on the State exchequer, said he.
It has been observed often that the Supplementary provision is being made without due care and caution, which results in surrender of funds. In previous years, the total surrendered amount was substantial, even more than the Supplementary provision made in some years.
For example, in 2011-12, different departments were favoured with Rs 1,801 crore under the State Plan in Supplementary provisions whereas departments have surrendered Rs 2,177 crore.
This disturbing trend exposing the spending capacity of the officials was also repeated in 2012-13 when various developmental departments surrendered Rs 2,854 crore against an allocation of Rs 2,677 crore. The surrendered amount in 2013-14 was Rs 1,701 crore against a Supplementary provision of Rs 2,809 crore.
It crossed all limits when in 2014-15 the surrendered amount was a whopping Rs 10,469 crore against a Supplementary provision of Rs 1,494 crore. In 2016-17, even more Supplementary provisions were surrendered when the allocation was Rs 5,150 crore and the surrendered amount was Rs 6,834 crore.
Against this backdrop, the Finance Secretary has urged the Secretaries to pay personal attention for preparation of the Supplementary Budget proposals for 2018-19.