Home Finance State Begins Supp Budget Exercise

State Begins Supp Budget Exercise

Bhubaneswar: The State Government has initiated the process for the Supplementary Budget 2021-22, which is likely to be presented before the Assembly in coming sessions.     

Principal Secretary Finance Vishal Kumar Dev has issued detailed guidelines for the Departments to prepare their supplementary proposals expeditiously and in accordance with the prevailing economic condition. All the Departments have been asked to submit their proposals by 25 August.

Elaborating on the present situation, Mr.Dev said the State is fighting the pandemic with the approach of saving lives and providing livelihoods as priorities. The Odisha Budget, 2021-22 was presented in the Assembly on 22 February, 2021 prior to onset of the second wave of pandemic.

The focus of the Budget was on enhancement of capital expenditure, strengthening the health care – through up-gradation of existing facilities and building new state-of-art medical infrastructure, creating industrial and skill development hubs, boosting tourism and transforming rural and urban Odisha, so as to put the economy on the right track, he said.

The State is successfully fighting with the 2nd wave of COVID and the possibility of a 3rd wave cannot also be ruled out. Under these circumstances, the recovery of the national and subnational economies is likely to be gradual, he pointed out.

“Hence, the State may have to downgrade the growth expectation to 9% in 2021- 22 compared to the original estimate of 11.5% projected at the time of formulation of Annual Budget, 2021-22 primarily because of lower level of economic activities due to COVID induced lockdown,” Mr.Dev anticipated.

However, own revenue during the first quarter of the year 2021-22 has shown substantial increase of about 117% mainly because of lower base and substantially higher collection of mining revenue during the current year.

Compared to April-June, 2020, the growth revenue from all the sources has registered a growth of 24%.

The total expenditure (other than debt servicing) during the first quarter of FY 2021-22 is 17.33% of the Budget Estimate 2021-22 compared to 14.35% previous year.

Though the expenditure has shown visible progress during the month of June, 2021, further effort is required to increase the pace of expenditure particularly Capital expenditure to enhance the level of economic activity thereby creating employment opportunities as part of counter-cyclical fiscal policy measures, he told the Departments.

At the same time, there is a need to ensure that the current lockdown imposed for containing COVID cases does not substantially affect the revenue collection, Mr.Dev said.

Though there is fiscal space to avail more borrowing during the current year, the slow recovery of GSDP along with the anticipated 3rd wave of pandemic will destabilize the debt sustainability achieved by the State by prudent financial management practices over the years.

Therefore, the Departments have been directed to prepare the supplementary budget proposal in a holistic manner so that economic activities in the State will rebound to the level prior to onset of the pandemic.

The Supplementary Statement of Expenditure is proposed to be an exercise for re-prioritization of the Budget in which the Administrative Departments would be allowed to augment the provision in one unit only by locating equivalent savings in some other unit of expenditure. However, high priority Capital projects, COVID related packages & other announcements made by Government from time-to-time and proposals for enhancing livelihood activities shall be fully funded, he clarified.

“The supplementary proposals should not be prepared in a routine manner; rather should receive personal attention of the concerned estimating and controlling officer, so that the proposals are based on actual need and should commensurate with the actual spending capacity,” Mr.Dev said in his circular to all Departments.

Principal Secretary Finance further informed that sufficient provision has already been made for pay and DA in 2021-22 (BE). Besides, additional provision under the unit salary shall only be allowed, if the provision becomes inadequate due to filling up of posts or otherwise.

Funds will be made available for State Sector Schemes and Centrally Sponsored Schemes (CSS) as per existing guidelines, Mr.Dev added.