5T Initiatives: Odisha’s Fiscal Management Endeavours Bear Fruits; Only State in the Country to Reduce Debt Liabilities

Bhubaneswar: Propelled by the revolutionary 5T Initiatives of governance, Odisha under the leadership of Chief Minister Naveen Patnaik is steadily and successfully inching towards reducing its debt. At a time when the country as a whole and other states are adding huge debts to their economy, Odisha has been able to reduce its debt significantly. According to the data released by the Center, Odisha is the only state in the country to reduce its debt liability during the year 2022-23.

According to the data released by the Central Government, Odisha was the only state in India which has reduced its liabilities to Rs 113,856 crore during the financial year 2022-23 from Rs 129,356 crore during 2021-22. This positive development in the State’s economy is possible due to the successful implementation of the fiscal management endeavours propelled by the 5T Initiatives.

According to the report, during the 2022-23 financial year, the total accumulated debt liabilities of the State governments and union territories saw a significant rise. While Tamil Nadu had the highest accumulated debt at Rs 753,860 crore in comparison to Rs 656,626 crore in 2021-22, Uttar Pradesh saw its debt rise to Rs 710,210 crore during 2022-23, from Rs 656,626 crore in 2021-22. Maharashtra’s debt increased to Rs 680,357 crore during 2022-23 from Rs 596,689 crore during the previous financial year. West Bengal’s net liabilities touched Rs 608,313 crore in 2022-23, from Rs 550,708 crore during the previous year. Likewise, Rajasthan’s net liabilities increased to Rs 537,013 crore during 2022-23, from Rs 458,089 crore in 2021-22. Karnataka also witnessed its debt increased to Rs 535,157 crore in 2022-23, from Rs 473,438 crore during the financial year 2021-22. According to the Central Government data, the outstanding liabilities of as many as 28 states increased by over 43% during the three years from March 2020 to March 2023.

On the other hand, on the basis of better fiscal management, Odisha became the only state in the country to reduce its debt by more than twelve percent during the last fiscal year. Odisha reduced its debt liability due to the Government’s thrust on fiscal management, a robust economy propelled by industrial growth and adherence to RBI stipulations on borrowings. In fact Odisha, under the leadership of Chief Minister Naveen Patnaik, has become a role model for the whole country when it comes to fiscal management. Odisha has been continually reducing its debt liabilities for the last few years leaving behind many large states like Tamil Nadu and Maharashtra.

Earlier this year, CM Naveen had said that “At the core of all the success stories of our State is our fiscal discipline, effective mobilization of resources and formulation of public policies ensuring proper and just use of the resources”. “Our own tax revenue collection has increased substantially and our own revenue constitutes 60 percent of our total revenue receipts. Our reliance on Central transfers has reduced and it now stands at 40 percent of our total revenue receipts. Our Integrated Financial Management System is now a model for other States to develop their own treasury management system”.

In such a context, the public financial management encompassing a gamut of activities, like –strategic budgeting, effective administration of GST and IFMS enabling just-in-time funding system, assume greater significance in achieving our dream of a prosperous Odisha, the CM added.
“Our Government has taken transformational initiatives to ensure timely delivery of scheme benefits and quality public services. The twin initiatives of 5T and Mo Sarkar have brought in a sea-change in governance mechanism, and have ensured public participation in the development process.” he further said.

The growth story of Odisha continuous with the state emerging as one the best performers in the country in terms of improving and expanding its economy. In the last six years, Odisha’s economy scaled new highs and the state has more than doubled its Gross State Domestic Product. According to a report by the India Ratings and Research, Odisha has managed to neutralize the impact of pandemic and its economy grew the most between FY 2016 and FY2022. The state has more than doubled its economy in the last six years on a nominal basis. Odisha’s growth story is going to be more interesting in the coming years as the state’s capital outlay has been increased significantly when compared the to the GSDP between FY 2016 and FY 2022. Odisha’s capital outlay to GSDP averaged 4.3 percent during FY16-FY22.

Another interesting aspect of the growth is that Odisha’s share in India’s GDP has also increased. Odisha has recorded a continuous rise in its GDP and now its share in the country’s DGP stands at 2.8 percent when compared to 2.6 during 2011-12.

In terms of tax collections also, Odisha has been reporting robust growth. The state has recorded forty percent growth in GST collections during February 2023. In March 2023, Odisha recorded a gross GST collection of Rs 4,749.02 crore., recording a 15.14 per cent growth over last year. Odisha’s per capita income is also increasing and the state’s PCI is now estimated at Rs 1, 50,676 as compared to the national PCI of Rs 1, 70,620. The gap is reducing and in the next few years Odisha’s per capita income is projected to be more than the national average and will be among the top ranking states.