15th Finance panel hails Odisha's farm package as 'best conceived'

The visiting 15th Finance Commission chaired by N K Singh extolled Odisha's latest farm package scheme titled KALIA as the best-conceived scheme for the distressed agriculture sector. The commission, though, had an advisory for the state government to focus on crop diversification and enhancing yield, especially of rice.

The panel felt KALIA or Krushak Assistance for Livelihoods & Income Augmentation bettered the typecast farm loan waiver announcements as it catered to all categories of the farm community.

“The KALIA scheme in many ways is the best-conceived scheme. It has won all round commendation. The focus now has to be on the scheme implementation. Both identification of the beneficiaries and implementation has to be done in a manner which matches the parameters of credibility and transparency”, Singh told reporters here.

The Commission lauded Odisha's consistently high growth trajectory but the state has faced significant volatility which could be due to natural disasters. Odisha is the 16th state the Commission has visited.

The panel expressed dismay that the state despite being home to more than 72 per cent of the mineral resources has a rather modest contribution from the manufacturing sector.

On alleviating poverty and raising per capita income, the Commission acknowledged the strides made by the Odisha government, though with riders. “Poverty still continues to be significantly higher than the all India average. Per capita income of Odisha, too, has a lot of catching up to do”, said Singh.

The panel tore into Odisha's creaking health infrastructure, stressing on the need for greater availability of doctors, ramping up the number of functioning medical institutions and making primary health care centres more accountable. Odisha's strength, the Commission, noted lay in its political stability and enlightened political leadership.

Asked on Odisha's demand for special category status, Singh replied, “It does not fall within the purview or Terms of Reference of the Commission. Regarding Odisha's special package, they have demanded 90:10 ratio for centrally sponsored schemes. The issue of vertical devolution is an ongoing exercise and we have not made up our mind. The Commission is still awaiting the detailed submissions of the central government”.

Among the key recommendations submitted to the 15th Finance Commission, the Odisha government has pitched for increasing tax devolution from 42 per cent to 50 per cent, making cess and surcharges as part of divisible pool, use of 1971 population as devolution criteria, extension of GST compensation for another 10 years and clean energy cess to be spent in coal mining areas. In addition, the state government has demanded at least Rs 1500 crore package for disaster management to build more cyclone shelters and improve our warning systems.

Odisha has submitted a consolidated demand to the Commission, amounting to Rs 8.24 trillion, comprising components like pre-devolution revenue deficit (Rs 6.71 trillion), state-specific need (Rs 87,520 crore), disaster response (Rs 11,875 crore) and grants to local bodies (Rs 53,884 crore). 

On chief minister Naveen Patnaik's recent demand for fiscal autonomy, Singh said, “Fiscal autonomy is guaranteed in the Constitution. Fiscal autonomy can lead to multiple interpretations. The central government should not dabble in subjects which are under the purview of states.”