With Finance Minister Pradip Kumar Amat all set to present the State’s Annual Budget for 2015-16 in the State Assembly on Monday, the size of the Budget is unlikely to be in tune with the increasing trend that the State registered during the last three fiscals, thanks to the uncertainties of funds flow prevailing for institutional transitions and low tax collection trend.
The Annual Budget was nearly Rs40,000 crore in 2012-13, around Rs60,000 crore in 2013-14 and Rs81,720 crore in the current fiscal. A positive trend of Rs20,000-crore increase in each of these three years was construed an indicator for the jack-up of the 2015-16 Budget size to over Rs 1 lakh crore. As per media reports, Amat is expected to present a Budget of around Rs88,000 crore for the next fiscal, including Plan size of Rs44,000 crore and Non-Plan size of Rs44,000 crore.
Notably, not only in these three years, if the Annual Budgets of the last 14 years of the Naveen Patnaik regime is seen, the State has got an increased Budget size every year, from 2014-15 in 2000-01 to Rs81,720 crore in 2013-14. As percentage of Gross State Domestic Product (GSDP), the Budget size each year has remained within the range of 17.7 to 24.6 per cent during the period.
The uncertainty of funds flow from the Centre is reasoned out to replacing of the Planning Commission with the NITI Aayog. It is not clear how much funds would come from the Centre through the NITI Ayog. Earlier, the State Government used to get an idea of the Annual Plan size before preparing its own Budget. This year, the Plan size could not be estimated in advance. However, the State Government has finalised the State Plan size with ifs and buts.
Similarly, implications of the Fourteenth Finance Commission recommendations are yet to be ascertained as it is yet to be known in what form the Centre is accepting the commission’s recommendations. If expectations that the Central devolution to the states would be to the tune of 50 percent of the total taxes collected by the Centre are translated into reality, Odisha would get an additional Rs6,000 crore per annum, feel insiders.
likewise, uncertainty in continuation of the Centrally-Sponsored Programmes (CSPs), most of which are being re-structured, has made the State speculative. Central funds under 66 CSPs are channelised through the State Consolidated Funds instead of out-of-Budget financing these days. With the GST (Goods and Services Tax) is expected to replace VAT (Value-added tax) from the next fiscal, the State is unsure of its share from the GST. In the absence of a clear compensation mechanism for the tax loss due to GST introduction, it is difficult to assess the State’s own tax revenue for the year 2015-16.
Besides, fall in rate of Tax Revenue Growth and negative growth in Non Tax Revenue collections have also been caused for a low-size Budget, feel finance experts. The Tax Revenue collection had registered a growth of 14.8 percent during April-November period of 2014-15, which is about two percent less than the expectation of the original Budget. The Non Tax revenue collection has registered a negative 18.14 per cent growth during the first eight months of the fiscal. Mining revenue has been downed by 23.85 per cent.