Home Finance 3.15 L CR Budget By 26-27!

3.15 L CR Budget By 26-27!

Bhubneswar: With the strong fiscal management and prevailing economic growth rate, the State Government has projected that the budget size of the State will reach Rs 3.15 lakh crore in the financial year 2026-27.

The Finance Department has published a State Fiscal Strategy Paper recently. As per the paper, the budget size for FY 2022-23 was estimated at Rs. 2 lakh crore which was 17.6 percent more than the previous year budget estimate. Looking at the revised estimated for FY 2022-23, the budget size for FY 2023-24 was Rs 2.30 lakh crore which is 12.5 percent more than the previous year’s total budget size including supplementary budget.

In the medium term, the budget size is projected to reach Rs. 2.55 lakh crore in FY 2024-25, Rs. 2.85 lakh crore in FY 2025-26 and Rs. 3.15 lakh crore in FY 2026-27, it said.

Over the past eight years, Odisha’s economy has grown at an average rate of 8.1 per cent. This has been faster than national GDP growth and among the fastest-growing state economies in India. As a result, the State’s share of the national economy has grown to 2.5 per cent of GDP.

The economic growth rate of 11.5 percent during the last financial year i.e., FY 2021-22 was oddly very high because of base effect and contraction in the economy during FY 2020-21.

The growth rate of the economy during FY 2020-21 was -5 percent due to the pandemic. The following year, the economy started to recover despite the sporadic appearances of the Omicron wave.

However, due to universal vaccination and proactive health care policies of the State Government, even multiple rounds of the Omicron waves did not have negative impact on the economic activities. After registering double digit growth in FY 2021-22, the economy is most likely to have a growth rate of 7.8 percent in FY 2022-23.

For the medium term, GSDP growth is projected at 8 percent. In the upward scenario, the economy is projected to grow at 9 percent in the medium term whereas in the downward scenario, the economy will grow at less than the potential economic growth of the State.

However, these scenarios enable the State Government to improve the budget preparation process and to maximize flexibility in the budget formulation.

This approach also supports the formulation of fiscal policies over the medium term, enabling the Finance Department to maintain a clear view of fiscal indicators over the next three years.

Based on the trend of revenue collection up to January 2023, total revenue receipt has been estimated to be Rs 1,63,500 crore which has a growth rate of 6.8 percent over the last year’s total revenue receipts.

It is estimated to be at Rs 1,84,500 crore in the budget estimate for 2023-24. The growth in total revenue is mainly on account of good performances in own tax and non-tax revenue sources. In the Own Tax Revenue (OTR), GST and VAT are expected to have very good growth.

In the Own Non-Tax Revenue(ONTR) front, mining revenue has contracted during FY 2022-23 when compare to FY 2021-22, nevertheless it still has 190 percent growth over FY 2020-21.

The Own Tax Revenue is estimated to be Rs. 53,000 crore whereas Own Non-Tax Revenue is projected to be Rs 52,500 crore during FY 2023-24.

Overall state own revenue which consists of both own tax revenue (OTR) and own non-tax revenue is expected to grow at 11 percent during FY 2023-24 to FY 2026-27.