The State Cabinet on Tuesday approved an amendment to Odisha Fiscal Responsibility and Budget Management (FRBM) Act on the basis of the consent received from the Government of India.
This would enable the State Government to meet higher resources requirement for Covid-19 management, maintain the standards of service delivery to the public, compensate the shortfall arising out of GST implementation (GST compensation shortfall) and maintain the level of Capital Expenditure on infrastructure projects.
With the proposed amendment, the State Government would be able to avail additional fiscal deficit of 2% of GSDP during the financial year 2020- 21.
This includes unconditional borrowing of 1% of GSDP and the balance 1% depending upon implementation of following four sectoral reforms, each carrying weightage of 0.25%: Implementation of One Nation One Ration Card System; ease of doing business reform; urban local body or utility reforms; and power sector reforms; carry forward unutilised borrowing ceilings availed during the financial year 2020-21 to the next financial year; avail special borrowing under the
Special Window towards the GST compensation shortfall over and above the above relaxation; and avail additional fund in the forms of 50-year
interest free loan under the "Scheme for Special Assistance to States for Capital Expenditure” over and above the above relaxation.