In coming years, Odisha would be getting a lesser share from Central taxes, according to the Fifteenth Finance Commission (FFC) recommendations.
Based on FFC recommendations, the Central Government has already curtailed its grants to the State by Rs 3,000 crore for 2019-20.
In coming years, the State would also receive lesser amounts Central grants as the FFC has adopted 2011 population growth rate as its mandate replacing 1971 population criteria for determining devolution of Central taxes.
Odisha’s share of the country’s total population declined to 3.53 per cent in 2011, which was 4.04 per cent in 1971. So, the State would get less share from Central taxes, which would pose serious problem for the State, said officials.
While earlier Odisha was getting grants at 4.641 per cent, now it is getting 4.629 per cent under the revised formula of FFC.
During the last financial year, Odisha had received around Rs 37,000 crore from the divisible pool of Central taxes. However, it would receive Rs 34,000 during the current year.
While mining royalty contributes 25 per cent to States’ own revenue, non-revision of mining royalty for years has added to the woes. Royalty on coal, iron ore manganese and other major minerals have not been revised despite repeated requests made by the State Government.
Again, as mining blocks being auctioned and they would take time for operation, the State is likely to earn less royalty.
The State may opt for more market borrowings to make up its fund need.
While the Appropriation Bill for 2020-21 will be approved on 31 March, officers are now trying hard to find out ways and means to increase more revenue for the State to finance Developmental spending, said sources.