Odisha to set up centre for fiscal policy and taxation
The centre is proposed at Madhusudan Das Regional Academy of Financial Management (MDRAFM)
The centre is proposed at Madhusudan Das Regional Academy of Financial Management (MDRAFM).
"Recently, a proposal was moved by Commercial tax department to set up a Centre of excellence in fiscal policy and taxation for effective implementation of (Fiscal Responsibility and Budgetary Management) FRBM Act at all levels and conducting research in the field of fiscal policy and taxation. It was decided to examine the prospect of setting up the said Centre in MDRAFM," said the additional commissioner of commercial tax in a letter to the academy. The centre would carry out research in areas of fiscal policy including budgetary analysis, tax administration, taxation, econometrics and other related areas through use of specialised software. Besides, it would also analyse the current method of government spending and will advise the government regarding adopting best practices in ensuring value for money spent, the additional commissioner wrote, detailing purpose of the institution.
The state government felt the need of such centre as its fiscal deficit is widening year after year. Though Odisha was fiscal surplus till 2007-08, from 2008-09 it has become fiscal deficit due to populist programmes and other expenses. While in 2009-10, the fiscal deficit stood at Rs 3,754.07 crore, in the current financial year it has been projected at Rs 8,763.82 crore. The major expenditures of the government is salaries of state employees. However, capital expenditure in infrastructure projects has also seen a boost in recent years as part of the government's commitment to spending in construction of roads and bridges.
Recently, the commercial tax wing of the state finance department proposed a host of proposals such as enhancing sales tax on liquor and retail petroleum products to boost its revenue earnings, which has seen sluggish growth in past two quarters on account of drop in mining revenue, the biggest contributor to its non-tax income. The government has been looking for alternative means to augment its earnings as mining revenue, which is higher than last year but is behind its target, has not come to its rescue due to weak mining activities as a result of curb on illegal mining.
In spite of this, Odisha has the lowest aggregate fiscal deficit among other states of India. Uttar Pradesh has highest deficit in terms of rupees and Manipur tops the list in terms of percentage to Gross State Domestic Product (GSDP).