Odisha Budget 2020: Fin Min Pujari Presents A ‘Rosy’ Budget With Inherent Thorns!

The record spending sees a cut in many vital sectors. The 7% GSDP growth simply not suffices as the per capita GSDP gain is mere Rs 248 in 2020-21

Bhubaneswar: Finance Minister Niranjan Pujari has presented a record Rs 1.5lakh crore budget for 2020-21 fiscal year. The State is projected to grow by 7 per cent. How much will be the gain to people?

A detailed glance at the budget fineprint reveals the inside story of this highest ever budget size.

GSDP Story: As per the 2019-20 Advance Estimates, the GSDP estimated at Rs 5.338 lakh crore. The 2020-21 Budget Estimates put the GSDP at Rs 6.53 lakh crore. The per capita GSDP gain stood at mere Rs 248.33. It is this highly low value that is discernible on the ground through poor development  and prosperity indices.

The pictures of pregnant women/acute sick persons being carried on a sling to hospitals have become a deja vu. People in rural areas cry for potable water in summer or for all-weather roads in rainy seasons.

During the last decade, the Odisha government has kept on increasing the budget size in a big way. But the substantial hikes are not discernible qualitatively in the same measure on the ground. Will this year’s biggest spending bonanza bring a paradigm change?

A threadbare analysis of the Budget 2020-21 and some vital indicators give the clues.

The FM Niranjan Pujari, though, has brought reforms in budget making and budget presentation process, the reforms the State urgently needs have not been dealt with frontally. Post winning a landslide majority, the expectations have been that Naveen-led BJD government will usher in some new road map for a New Odisha.

But the Budget 2020-21 still remained hostage to the age-old hurdles on the growth path.

Consider this. The budget document shows a whopping 74.76 per cent of Rs 1.5 lakh crore will go towards the select committed expenditures like salaries & pensions, debt servicing (including interest payments) and revenue expenditure.

Only a proportion of 22.54 per cent of the Rs 1.5 lakh crore spending bonanza will go for asset creation or say will be adding value and services to the State’s GSDP.

A further declassification of the total revenue expenditure shows nearly 50 per cent (49.7%) of the total of Rs 1.14 lakh crore will go towards administrative expenditure.

Now, sample this interesting budget arithmetic. When State’s own tax revenues (tax + non-tax) for the fiscal year 2020-21 stood at Rs 56,000 crore, the administrative expenditure of the State stood at Rs 57,055 crore.

When such is the scenario, to finance the Odisha’s development imperatives, Odisha has to bank on borrowings. And higher borrowings add to the debt stock of the State.

The budget 2020-21 has estimated the debt stock at Rs 1,13,237 crore, which has inched up to take a share of 19 per cent of the GSDP. FM Pujari downplayed the rising debt stock by hiding under the fact that it is still less than the stipulated 25per cent limit under the FRBM Act.

But a significant budget arithmetic. The total debt stock of Odisha as on Mar 31, 2021 will be Rs 1,13,237 crore. In contrast, the State’s total revenue receipts as on March 31, 2021 is estimated at Rs 1.5 lakh crore. This shows the total debt stock is taking a share of a massive 75.5 per cent of State’s revenue receipts. This number hints at how qualitative will be the growth of Odisha in 2020-21.

Now, Sector-wise  Analysis:

Education: The allocation for general education stood at Rs 19,129 crore. Another Rs 270.05 cr allocated for teacher education. The total allocation stood at Rs 19,399 cr against Rs 19,522 cr in 2019-20(BE). The ratio of total allocation for general education to total expenditure stood at around 12.9 per cent against 27 per cent in Delhi, which is highest by any state in India.

Public Health: The total allocation for 2020-21 stood at Rs 7,925 cr. Overall allocation for Health & Family Welfare allocation in 2020-21 is 5.3 per cent of total expenditure vis-a-vis an average of 5.2 per cent during the period 2015-20. Delhi government spends 13 per cent of total expenditure on Health, which is highest in India.

Roads & Bridges:  The allocation stood at Rs 10,175 crore, which is 6.8 per cent of the total expenditure in 2020-21. The average proportional spending by State in 2015-20 stood at 9 per cent. Arunachal Pradesh spends highest (16.7%) in country.

Water and Sanitation: The total allocation for the vital sector in 2020-21 stood at Rs 7,848 crore, which is 5.2 per cent of total expenditure. The State average during period 2015-20 stood at 4.3 per cent. Highest Spending by Arunachal Pradesh (6%) and Goa (5.9%).  

Rural Development: The total allocation for this vital arena stood at Rs 11,695 crore, which is 7.8 per cent of total expenditure in 2020-21. The State average during period 2015-20 stood at 9.6 per cent. Highest spending by Jharkhand (14.8%) and Bihar (13.4%) in country.

The above analysis shows why the Budget 2020-21 will not be a  pathbreaking one to fit into the jargon of ‘historic’ budget.