Odisha’s subsidy burden ballooned courtesy natural disasters: CAG

Experts are of the opinion that subsidy on natural disaster could relegate the food subsidy bill to number 2 in 2019-20 owning to cyclone Fani.

Bhubaneswar: Natural disasters have made the subsidy bill of Odisha government soar to a new high in 2017-18. Subsidy expenses on natural disasters had risen by a massive Rs 391 crore.

As per CAG report ‘State of Finance’ laid in State Assembly recently, when the FRBM (Fiscal Responsibility and Budget Management) Act has mandated to prune the subsidy bill by 10 per cent every year, Odisha’s subsidy bill, however, had soared by a massive 19 per cent in 2017-18.

The amount spent as subsidy by the Revenue & Disaster Management Department in 2017-18 clocked a whopping 108 per cent rise to touch Rs 754 crore vis-a-vis Rs 363 crore in 2016-17, the report observed.

Significantly, the year 2017-18 had not witnessed any major calamity like cyclones or any worst flood or drought.

Still, the disaster subsidy budget soared solely due to amount distributed under the disaster relief code for drought in 3.15 lakh hectares in 70 blocks spread across 15 districts in 2017. Also, the massive Chakada pest attack in over 1.18 lakh hectares during October 2017 was considered another reason behind the big spike in natural disaster subsidy bill.

The CAG report has also noted that a 530 per cent rise in subsidy bill on Industries had an impact on ballooning the subsidy budget of Odisha government in 2017-18. The report added that subsidy on industries in the year 2017-18 touched Rs 170 crore from mere Rs 27 crore in 2016-17.

Subsidies granted to fishermen had also posted a rise to Rs 56 crore in 2017-18 from Rs 10 crore in 2016-17.

Following the rise in subsidy in some crucial sectors, the report added that the expenditure on subsidies cornered nearly 4 per cent of State’s revenue expenditure.

Experts are of the opinion that subsidy on natural disaster could relegate the food subsidy bill to number 2 in 2019-20 owning to cyclone Fani.

And increasing natural disasters could derail the State’s economy, because, while the natural disasters make big impact on productivity and at the same time shoot up the non-plan expenditure, they observed.

In contrast, the subsidy on agriculture stagnated at Rs 203 crore in 2017-18.

And the food subsidy, which accounted for the largest share in subsidy bill, had even recorded a 9 per cent dip to stay at Rs 886 crore in 2017-18 from Rs 970 crore in 2016-17.

According to CAG findings, the subsidy given by State Cooperation department to strengthen the cooperative societies has also dropped by around 4 per cent in 2017-18.

A  further glance at the subsidy bill shows that subsidies granted to handlooms & handicrafts account for mere 1.8 per cent of the total subsidy expenditure in 2017-18, when handloom and handicraft industries have provided employment to around 2 lakh people and the artisans are facing worst financial crisis in the State.  The total subsidy to the vital sector totalled to mere Rs 50 crore in 2017-18 from Rs 47 crore in 2016-17.