Odisha’s economy is expected to register a growth in the range of 8% to 8.5% in the year 2022-23.
While the State Government is preparing its Budget for 2022-23, a projection is planned as per the available scenario which reveals that domestic drivers are gradually improving though global factors are turning adverse.
So, the State’s economy is set to do much better than national economy. As per the Reserve Bank of India’s growth forecast, real GDP growth of India is projected at 7.2% whereas Odisha will have 8% to 8.5% of growth, said a senior officer in the Department of Finance.
Finance Principal Secretary Vishal Dev is having detailed deliberations with senior officials of the department and the Budget preparations focus on higher investment on infrastructure, employment generation, industries, MSMEs and social sector.
With such focuses, the State economy is expected to register a nominal growth beyond 12% in 2022-23, officials feel.
The focus is on revival of economy and employment generation to build a ‘New Odisha’ with upgrading of healthcare facility through up-gradation of existing facilities and building new state-of-the-art medical infrastructure, transforming rural and urban Odisha. creating more employment in all sectors.
Besides, capital spending will also require high priority for revival of the economy as a much higher growth in the GDP is planned.
While the size of the State Budget has grown by more than 15 times in last 21 years between 2000-01 to 2021-22, it has increased from Rs 11,047 crore in 2000-01 to Rs 1,70,000 crore in 2021-22.
As a percentage of GSDP, the size of the Budget has remained within the range of 20%-25% with minor inter-year variations.
So far as the sectoral composition of spending is concerned, the expenditure on general services, which was about 49% in 2004-05, has been brought down to about 25%.
The expenditures on social and economic services have been consistently increasing. In 2021-22, the expenditures on these services amounted to 37% each of the total budgeted expenditure.
This is a major change in the budgeting which is helping the State boost its social and economic environment, opine experts.
With the improved revenue performance, expenditure rationalisation and debt restructuring, the State’s dependence on borrowing has been reduced substantially. The debt stock and interest payment liability are much below the threshold of sustainability parameters.
In line with recommendations of the Finance Commission, the States are required to keep the debt-GSDP ratio within 25% and the interest payment-revenue receipt (IP/RR) ratio within 15%. The debt stock-GSDP ratio of the State has been brought down from 50.73% in 2002-03 to 17.38% in 2019-20.
Similarly, the IP-RR ratio has been brought down from 40.2% in 2001-02 to below 6% in 2020-21. Thus, the State has been able to stabilise the debt stock and achieve debt sustainability.