The report indicates that Odisha excelled in the debt index, attaining a perfect score of 99
OdishaPlus Bureau
Odisha has distinguished itself as a fiscal leader among Indian states by achieving the highest score of 67.8 in the inaugural Fiscal Health Index (FHI) report for 2022-23, published by NITI Aayog on Friday.
The report indicates that Odisha excelled in the debt index, attaining a perfect score of 99, surpassing states such as Chhattisgarh, Maharashtra, Karnataka, Kerala, and Tamil Nadu, which are known for their strong economies. Additionally, Odisha led in the debt sustainability category with a score of 64, and performed above average in Quality of Expenditure and Revenue Mobilisation, scoring 52 and 69.9 points, respectively. The state also received a score of 54 in fiscal prudence. Overall, Odisha has been classified in the ‘achievers’ category.
The Fiscal Health Index assessed 18 states that are crucial to India’s economic framework, focusing on public expenditure, revenue generation, and fiscal stability. The report highlighted that Odisha, along with Chhattisgarh, Goa, and Gujarat, has consistently ranked as a top performer throughout the periods analyzed in the study.
Odisha is recognized as one of the few states that have adhered to the Fiscal Responsibility and Budget Management (FRBM) parameters since 2005, implementing prudent strategies to maintain robust fiscal indicators. The report indicates that the state government acknowledges the necessity for a consistent rise in expenditure on essential sectors such as healthcare and education to meet its developmental objectives.
Furthermore, the report highlights that the revenue expenditure on health and education experienced a compound annual growth rate of 33.8 percent, surpassing the major states’ average of 22.6 percent CAGR from 2020 to 2022. It also noted that revenue and capital expenditures increased by 53.5 percent and 42 percent, respectively, from 2018-19 to 2022-23. Additionally, the report pointed out that capital expenditure on education, sports, arts, and culture has risen, attributed to increased funding under the Samagra Shiksha initiative.
The growth in urban development can be attributed to an increase in funding for new city projects, as stated in the report. It noted that since the fiscal year 2019-20, Odisha’s total debt has been on a decline, primarily due to the repayment of market loans. The ratio of outstanding liabilities to GSDP from 2018-19 to 2022-23 fluctuated between 15 percent and 24 percent, remaining within the 25 percent target established by the Fiscal Responsibility and Budget Management (FRBM) Act.
Furthermore, prudent expenditure management and initiatives to enhance internal revenue generation have led to a reduction in the fiscal deficit from 6.9 percent of GSDP in 2000-01 to two percent in 2022-23, which is compliant with the three percent threshold set by the FRBM. The state has maintained a revenue surplus since 2005-06, allowing the government to allocate more resources to socio-economic sectors and critical areas of the economy.
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