Subhas Chandra Pattanayak

The Opposition in Orissa Assembly walked out on 14 February 2006 as Finance Minister Prafulla Ghadei started highlighting his budget for the Financial Year 2006-07, which, even though styled as a balanced budget, is leashed to resources.

“The thrust of our budget is on growth, development, efficiency, social equity”, Ghadei declared.

It is stale, insipid and lackadaisical; and with such a budget the State cannot expect any development, alleged the Opposition before walking out.

In his budget speech, Ghadei relied upon the Orissa Fiscal Responsibility and Budget Management Act (FRBM Act,2005) to pivot expenditures on corresponding resources. “Unless there is substantial increase in collection of State’s own tax and non-tax revenue, it would not be possible to provide fund on the required scale for different developmental work and Social Security Programmes by incurring loan”, he said.

Stressing “on outcome rather the outlays, whether it is plan or non-plan”, Ghadei said, “Finance Department or State government alone cannot bring improvement in the systems. For this, the representatives of the people, leaders of all political parties, Government servants and intellectuals should debate and consult and all should work together”.

This is where the evasiveness in official approach to the most serious fiscal programme of the State stands bare, the Opposition exposed. Emphasis on ‘quality of implementation, efficiency and accountability of the delivery mechanism’, which Sri Ghadei has imported from the budget speech of Union Finance Minister, is too specific to countenance his extravagant attempt to shift responsibility from the government’s shoulders.

However, in absence of Opposition, Ghadei spelt out his fiscal strategy. Stressing on “fiscal consolidation and efficient fiscal management as per recommendations of 12th Finance commission”, he said that the budget is addressed to “reducing debt burden, interest payment and un-productive revenue expenditure’ while aiming at “enhancing State’s tax and non-tax revenue” to keep up release of more funds for implementation of different development works.

Notwithstanding emphasis on enhancement of tax and non-tax revenue, the Rs.19,553.58 crore budget is fashioned to be tax-free. Claimed to be balanced budget, it carries a revenue deficit of Rs.474.80 crores when the fiscal deficit is estimated to be 3812.10 crores. But the primary deficit stands at Rs.10.12 crores.

The Consolidated Fund comprises State’s own tax:25.55%, own non-tax:6.89%, Shared tax:26.73%, Grants-in-aid from Centre:18.57%, recovery of loans and advances:1.39% and loan from different sources:20.87% out of which debt servicing would take 19.44%, repayment of loans:10.92%, disbursement of loan (non-plan):0.40%; other non-plan expenditure:48.23% and investment in plan sector:21.01%.

But in the plan sector, expenditure in departments linked directly to peoples’ source of livelihood, does not look quite assuring. As for example, Agriculture has a plan ceiling at Rs.48.08 crores when the ceiling in respect of Textile & Handloom is fixed at Rs.12.40 crores, and Fishery & Animal Resources Development at Rs16.70 crores. Even the only department on which eligible job-seekers depend for employment and workers in organized as well as unorganized sectors depend for job-security and eradication of unfair labour practice by the employers, the Labour& Employment Department, has been clamped with a plan ceiling of only Rs. 16 lakhs!

However, Sri Ghadei has dedicated this budget to Lord Jagannath!

“Lord Jagannath is watching all our actions and activities and I hope that He will definitely help and bless us to march forward in the right direction”, he has concluded.

What then the Assembly shall do?