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Budget On Reorient Mode

With unexpected huge spending for control of Novel Corona Virus (COVID-19) Pandemic, Odisha Government will be reorienting its expenditure proposal and will be forced to revise its State Budget Outlays.

While spending on COVID Control is on rise, revenue generation is on wane, which has forced the state Government to reorient its expenditure in view of resource constraints.

Now nobody knows about how much funds are required for COVID Control as Virus is spreading its tentacles and it requires huge allocation, experts say.

Senior officials are busy in working out reorientation of spending proposal with a series of measures focusing on rural jobs, corona management, health care, education and other social sector.

However, officials are tightlipped over the changes, but admit that as the State is incurring additional expenditure on limiting spread of COVID-19, State Budget will have to be revised to provide scope for such expenditure.

Changes are expected mostly on the lines of Government of India as the Centre is reorienting its Budget Proposals, officials admit.

While funds flow from Central Government is directed more on rural employment scheme, COVID Management, health care and other social sector, obviously the State Government will be taking cue from the Central Government, officials say.

In view of the revenue constraints of the State, low value capital expenditures are likely to be taken up and high value new projects will be deferred, experts feel.

While the State Government has announced Rs.17,000 Crore stimulus package already, a gradual and multiple fiscal stimulus packages needed, not like such big ones, say experts.

Accordingly, in future, a number of doses of stimulus are likely to be presented by the state Government, expect the experts.

Similarly, State Government will be opting for austerity measures and details are being worked out, said sources.

While 50 Percent Salary Cut of All India Service Officers have been affected, other service officials are kept out of the curtailment.

Instead of such huge salary cuts, at least 25 Percent cut in salary across the employees will be able save lot of resources, say experts.

Unnecessary, undesirable and low multiplier expenditures will be avoided by the State Government, indicate officials.

Changing the composition of expenditure and cutting flab would enhance the growth boots, say experts engaged in such exercises.

While several state Governments have opted for short term market borrowings, Odisha is opting for low cost borrowings from RIDF and others.

This year, Odisha is expected to borrow more from RIDF for infrastructure funding as such credits are low cost and NABARD controlled funding source is also helpful for the state.

Similarly, State has decided to go for cheap source of borrowing from OMBADC and CAMPA.

As Lock Down is expected to continue longer as COVID-19 Pandemic is spreading its tentacles, these steps are likely to help the State in long term, officials opine.
 
 
 
 


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