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Odisha’s Election Budget

News Date:26-Feb-2013

Bhaskar Parichha: American businessman Ross Perot once said, ‘the budget should be balanced, the treasury should be refilled, the public debt should be reduced and the arrogance of public officials should be controlled.’ Whether Odisha Finance Minister Prasanna Acharya had considered all these factors while giving his thoughts to the budget no one is sure, but he has, without doubt, presented a please-all budget.Acharya is of course new to budget making, Prafulla Ghadei having been at the helm of affairs for quite a long time. But that shouldn’t been a handicap for the legislator from Bargarh who has a long experience in administration. Budgets are after all bureaucratic exercises and what the politician has to do is to convey the idea and see to it that the voters’ aspirations are met with equanimity. Now for a bit of statistics. The budget for FY 2013-14 is a huge one - Rs 60,303 crores. The overall increase in budget size is about 16% over last year’s budget. The budget presented by Acharya is also a revenue surplus one meaning that the income of the government exceeds expenditure. A surplus budget is usually considered a sign that government is being run efficiently. A whopping Rs. 1904.61 crore has been projected as surplus which is 0.65% of the Gross State Domestic Product (GSDP). The outlay for the State’s Annual Plan has been fixed at ¬ ¬Rs. 21467 crore which includes an outlay of ¬ ¬Rs. 19367 crore for the Government sector and ¬2100 crore for the Public Sector Undertakings. The Plan: Non Plan ratio has gone up from about 27% in 2006-07 to about 59% implying that there is a meaningful use up of money. This is claimed to be the highest ever ratio achieved by the state. As per the budget documents, the Budgeted Expenditure will be financed through estimated revenue receipts of ¬Rs. ¬51298.98 crore, recovery of loans and advances of ¬ ¬Rs. 240.29 crore and borrowing and other receipts of ¬Rs. ¬8763.82 crore. The Fiscal Deficit is projected at ¬ ¬Rs. 5945.13 crore which is only 2.03% of GSDP. The year-end debt stock for the financial year 2013-14 is estimated at ¬Rs. ¬45561.12 crore which is 15.58% of GSDP. In other words, the budget is fully compliant to provisions of the FRBM Act. Industry body Assocham has welcomed the budget saying it would ‘lead to development of rural and urban infrastructure, generate new jobs both for skilled and unskilled people and help attract investments.’ The Minister has in fact done a splendid job by not imposing fresh taxes and at the same time has taken care of all sections of society. Focus on fishermen and women self-help groups is commendable, so also the investor-friendly policies. Once these provisions are put to action, global investors will be keen to invest in Odisha. Renewed focus on infrastructure development, agriculture and the small and medium enterprises (SMEs) has come at the right juncture. But what has caught the attention of the layman as well as the scholarly is a separate budget for agriculture. Taking a cue from Karnataka and on the ‘instructions of the Chief Minister Naveen Patnaikji’ -as he mentioned in his budget speech-the Minister presented the budget in two parts. From industry bodies to academicinas, there was admiration for this bifurcation of the budget. Whether a separate budget for agriculture will give the necessary fillip to this sector remains to be seen .But there is no doubting the intentions of the government –increased focus on agriculture. Why this sudden feel of affection for agriculture one is sure to ask? Is it because the government’s love for industry has gone sour? Or is it a mere lip service to this important sector of the economy? Whatever it is, the focus on agriculture and the positive shift will benefit farmers and the rural poor, besides giving a boost to the agricultural sector. The budget has yet another dimension-the competitive populism. Governments try to placate the voters through various schemes and announcements. If it is election time, the sops go overboard. There is a clear imprint of the forthcoming election on the budget. The finance minister has indeed tried to take along all sections of the society. The budget provisions would make one feel that the government wants to upturn the whole situation and usher in an overnight transformation. But there is always a huge gap between intentions and actions. Unless steps are initiated in the right direction, no pious intention can ever show the outcome. The biggest hurdle for the government departments is their inability to spend. Since a lot of money is allotted to the infrastructure development it becomes all the important to implement them within a time-bound manner. Additionally, it has to see that in a bid to complete the projects there is no compromise in quality. Budgets for their fallible nature are often compared to an Enron budget -- smoke the numbers, cook the books, hide the truth and hope no one finds out.

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