RBI report reignites ‘Central negligence’ row

Bhubaneswar: A recent report published by the Reserve Bank of India (RBI), which suggests that Central assistance to Odisha has declined, has reignited the debate over central negligence of the state.

The ‘Report on States Finances – A Study of Budget of 2015-16’ published by the central bank highlighted that central assistance to many states, including Odisha, has declined. As per the recommendation of the 14th Finance Commission, tax devolution by the Central government to Odisha has increased to 42 % from 32%. However, there has been a substantial decline in the grant-in-aid in the budget. Consequently, Odisha will receive Rs 3,425 crore less from the Centre in FY 2015-16. The Odisha government will stand to lose Rs 4590 crore in FY 2016-17.

Moreover, in the meantime, assistance has been stopped to 8 central programs by the BJD-led NDA government at the Centre. Similarly, the proportion of assistance to 33 projects has also declined.

On account of this decline, Odisha government has been forced to resort to market borrowing. In 2015-16, the total borrowed amount stood at Rs 3000 crore.

The figures presented in the RBI report has provided fresh ammunition to the ruling BJD to train its guns on the Central government.

“The Report published by the RBI clearly proves that we were right and the what BJP’s national and state leaders were saying was false. The union ministers and the senior leaders of BJP must give clarifications on the facts presented in the RBI report,” said BJD spokesperson Pratap Deb.

“I don’t understand where Odisha is getting more from the Centre. Rather, a lot of schemes have been curtailed. Neither the central government nor the state governments is at all concerned about the people of Odisha and both are only talking hollow,” said Congress leader Niranjan Patnaik.

The BJP has, however, sought to put the blame on the state government for the fall.

“One should consider the fact that tax collection in Odisha has been lower. In proportion to this drop in tax collection, the data shows a decline,” said general secretary of Odisha BJP Prithviraj Harichandan.