Odisha records Rs 622 cr fiscal surplus on low capex
Tax, non-tax revenue growth slows in 2011-12
Weighed on by lacklustre capital expenditure, the Odisha government has amassed fiscal surplus of Rs 621.76 crore by the end of 2011-12 compared to a projected deficit of Rs 5988.65 crore.
Capital expenditure excluding debt repayment and loans and advances was budgeted at Rs 5,662.37 crore for 2011-12 whereas actual capital spending was Rs 4,496.08 crore, an achievement of 79.04%. The growth in capital expenditure in 2011-12 was a meagre 4.92% over Rs 4,285.10 crore logged in 2010-11. As a percentage of total expenditure (excluding debt repayment), it has declined from 12.62% in 2010-11 to 11.30% in 2011-12.
"Expenditure by different government departments, especially capital expenditure leaves a lot to be desired. Though introduction of Cash Management System has brought in improvement, the departments still continue to struggle on spending”, said a senior finance department official.
The state's revenue expenditure, too, fell short of the budgetary estimate (BE) in 2011-12. Expenditure on revenue account stood at Rs 3,4660.23 crore which was 95.42% of the BE of Rs 3,6323.23 crore. While interest expenditure was budgeted at Rs 4,047.33 crore, actual expenditure on account of interest payment was Rs 2,576.43 crore.
On the positive side, social sector expenditure grew 25.78% in 2011-12 to reach Rs 14994.91 crore compared to Rs 1,1922.01 crore. Similarly, development expenditure rose from Rs 1,8999.56 crore in 2010-11 to Rs 2,3727.38 crore.
Besides fiscal surplus, the state also closed 2011-12 with a hefty revenue surplus of Rs 5,606.78 crore, a pointer to its tepid pace of spending. The revenue surplus was 43.46% more than Rs 3,908.21 crore for 2010-11.
State finance minister Prasanna Acharya has expressed concern on low tax/GSDP (gross state domestic product) ratio, lower growth in own tax and non-tax revenue compared to 2010-11 and sub-optimal level of capital expenditure. The minister has also stressed on improvement in revenue as well as level of capital expenditure for achieving sustainable development of the state.
Odisha needs to improve its tax performance to catch up with other states. Its tax-GSDP ratio stands at 5.94% compared to national average of 8.51%.
The state also registered lower growth in its tax and non-tax revenue in 2011-12 as against 2010-11. Tax revenue went up 20.10% in 2011-12 compared to 24.61% in 2010-11 whereas non-tax revenue growth at 34.78% was also slower than 48.82% posted in 2010-11. Total revenue in 2011-12 showed an increase of 34.78% compared to 30.99% growth in 2010-11.
The state achieved debt sustainability by reducing its debt stock to Rs 3,8589.28 crore by the end of 2011-12 which was 17.06% of GSDP. The debt stock was also well within the target of Fiscal Responsibility and Budget Management (FRBM) Act which mandates that debt stock-GSDP ratio has to be contained within 30.6% during 2011-12.