NIPFP says Odisha's FRBM compliance commendable

Despite volatility and the slowdown after 2007-2008 Odisha was able to achieve revenue and fiscal surplus and reduced the debt burden substantially in 2012-13 in the post FRBM period, says a government report.
The National Institute of Public Finance and Policy (NIPFP) report was presented in the state Assembly today by Finance Minister Pradip Kumar Amat.
"Odisha government consistently maintained strong fiscal position during the post FRBM (Fiscal Responsibility & Budget Management) period," the report said.
While budget projections for the year with regard to major fiscal outcomes were within FRBM Act stipulation, the state government managed to achieve improved out turns. In 2012-13, the revenue surplus was substantial at 2.23 per cent relative to GSDP and the state enjoyed a fiscal surplus situation, it said.

The outstanding debt burden was only 14.87 per cent of GSDP, which was well below the 30.2 per cent level recommended as prudent by the 13th Finance Commission. Compared to the fiscal targets specified for the year in the amended FRBM Act, 2011, a zero revenue deficit, fiscal deficit limit of 3 per cent of GSDP, and debt burden of 30.2 per cent to the GSDP were acheived by the state.
"These achievements were commendable," the report said.

As against a target of interest payment as percentage of revenue receipts at 15 per cent, the achievement has been only 6.39 per cent, the report stated.

The compression of both revenue and capital expenditure as compared to the budget estimates was the major instrument to achieve large revenue surplus and elimination of fiscal deficit in the fiscal year 2012-13.
However, actual revenue realisation exceeded the target marginally, the report said. It was the higher realisation of non-tax revenue that helped in meeting the revenue target as own tax receipts and central grants fell below the budget projections.
With rising revenue surplus and slow growing capital expenditure, the government reduced its dependence on market borrowing and even discharged some high cost loans to bring down its overall debt stock.

The state government accumulated a large cash balance 2012-13, which was invested in Government of India treasury bills with RBI, it said.