Larger Budget Size; but social sector issues still unaddressed by Odisha Government

Bhubaneswar: The implementation of 14th Finance Commission Recommendations was expected to bring transformative changes in the federal fiscal policies and governance leading to better outcomes both in the macro-economic indicators and key social sectors. The Commission has created a fiscal space that the states can utilize towards financing their priorities as said by Prof Abhijeet Sen.

In this framework, a greater part of responsibility for financing of social sectors has shifted to State Governments. However, the current state of affairs points towards persistence of a number of critical challenges in basic public services delivery and implementation bottlenecks.

In this context, emphasizing on the States’ Budgets in the 14th FC period, Odisha Budget & Accountability Center (OBAC) of CYSD organized a panel discussion on “Impact of 14th Finance Commission’s Recommendation on Social Sectors in the Eastern States of India, with special focus on Odisha” in Bhubaneswar, on 6th of April 2018.

It has also been seen that since the last four years the size of the state budget has substantially increased. However, the issues related to social sectors such as quality education, low sanitation coverage, unemployment, post production management (farmers’ issues) and good governance are still pertinent. It was also stated by Shri Tuhin Kanta Pandey (Principal Secretary) that the quality of education, rural healthcare services and its outreach needs to be improved. It was pointed by Shri Dillip Satapathy (Resident Editor , The Business Standard) that Private schools are more preferred over the Government ones due to poor quality education in the latter. Improving Budget governance lies at the core of efficiency, effectiveness and outcomes of the public investment that the state is making. As quoted by Shri Panchanan Kanungo (Ex- Finance Minister, Odisha), there is a need for good governance for proper monitoring of the government schemes and programmes.

An analysis on State budget 2018-19, prepared by OBAC, CYSD reports that Odisha is showing a revenue surplus since FY 2005-06, but still the level of investment in creation of capital assets over the years is not very impressive. It can be seen the share of capital expenditure accounts 21 percent of total State Budget.

The increased size of budget is financed by larger devolution from the Centre as well as the own sources of the state. However, it is important for the state to generate more revenue from its own sources. The 14th FC Recommendation has also suggested increased devolution to the local bodies. Again the efficiency, effectiveness and outcomes depend on strengthening of institutions at local level. Odisha has a unique opportunity to mobilize extra budgetary funds from sources like District Mineral Fund, CAMPA, and Construction Welfare Cess etc, these funds need to be judiciously utilized considering the key factors of regional disparities in the backward districts.


Key Persons Present in the deliberation : Prof Abhijit Sen, former member, Planning Commission of India, Prof Praveen Jha, JNU, Shri Tuhin Kanta Pandey, Principal Secretary, Finance Department,GoO, Prof Sudhakar Panda VC, Birla Global University, Shri Panchanan Kanungo, Former Finance Minister, Odisha, Shri Dillip Satpathy, Resident Editor, The Business Standard Shri Jagadananada, Mentor and Co-Founder CYSD.

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