Odisha Interim Budget 2019: Fiscal Prudence Over Populism
In the final interim budget before the scheduled Assembly polls, the Naveen Patnaik-led BJD government has bet big on a farmer-centric budget, while allocating plentiful resources to existing schemes and programmes. Finance Minister Shashi Bhusan Behera laid out the interim Budget before the Legislative Assembly on 7th February 2019 and portrayed a healthy picture of the State’s financial position. The total outlay for the interim budget was pegged at ₹56,921 crores, which would cover the months – April to July 2019. The full budget, which is expected after elections are over, is expected to have an outlay of around ₹132,660 crores – 10.4% higher than that of the last fiscal year. The Odisha government must be commended for maintaining fiscal prudence over populism, despite being headed for the polls.
Fiscal deficit for the state in 2018-19 was contained at 2.9%, lower than the 3.5% deficit projection in the budgetary provisioning last year. Even for FY2019-20, the government expects fiscal deficit to be at 3% of the GSDP, in line with the recommendations that were proposed by the NK Singh Committee while reviewing the FRBM Act 2003. The Budget estimates a revenue surplus of ₹8433 crore – which converts to around 1.6 per cent of Odisha’s GSDP. The expenditure account is expected to be financed principally by revenue receipts, worth ₹1.1 lakh crore for the next fiscal.
Funds have been showered graciously on popular schemes run by the State government. ₹4461 crores has been earmarked for Odisha’s pioneering KALIA scheme, which aids farmers and helps construct a long-run solution to agrarian distress. Provisioning of funds has also been ensured for numerous other social welfare schemes, which includes the CM’s pet scheme Ama Gaon Ama Bikash (₹400 crores), rural water supply project BASUDHA (₹2935 crores), social security measures Madhubabu Pension Yojana (₹2120 cr.) and MAMATA (₹305 cr.), healthcare scheme Biju Swasthya Kalyan Yojana (₹864 cr.), and Gopabandhu Grameen Yojana (₹500 crores).
Finance Minister Sashi Bhusan Behera was buoyant about Odisha’s economy, with growth in the next fiscal expected to hit 8.35% against a national average of 7.2%. Chief Minister Naveen Patnaik expressed his satisfaction with the budget, claiming that his budget was a “pro-poor, pro-farmer, pro-youth, pro-SC/ST, and development-oriented budget”. He also expressed his happiness at positive outcomes from several initiatives undertaken by the government, such as ‘Make in Odisha’, and the ever-increasing employment opportunities being generated for the youth of the state.
Odisha’s interim budget thus shows that it is indeed possible to be fiscally prudent, while at the same time give out enough doles and fund major governmental initiatives. Odisha can certainly aspire to be a model state as far as fiscal consolidation is concerned – it has shown that despite rolling out several service-oriented schemes, revenue generation is possible. This keeps the debt in check and prevents the economy from under-performing in times of stress. As celebrated American economist Paul Krugman puts it, it is after all, wise to maintain “profligacy in depression, and austerity in good times”.