As the Covid-19 pandemic and the subsequent lockdowns have had a sharp effect on the economy, experts have suggested that Odisha should focus on borrowing now and spending with such prudence that the state is able to recover to a higher growth trajectory sooner and thus repay the debt.
While speaking at a webinar organised by the Odisha Alochana Chakra, experts such as former chief secretary Jugal Mohapatra and former NIPFP professor Dr Tapas Sen said the government of Odisha had no option but resort to borrowing liberally so that it can meet the needs of the distressed migrant returnees, provide for higher spending on healthcare and continue with its welfare programmes.
“As economic activities remained suspended for most part of the April-June period, the Odisha government was seen raising only 60% of the revenues it had budgeted for the quarter. If this trend continues through the rest of the financial year, the government’s revenues in FY20-21 may fall about Rs 49,600 crore, or 40%, of the Rs 1,24,000 crore budget target,” said Dr Pravas Mishra, a public finance analyst with Oxfam India.
However, given that restrictions on people’s mobility and economic exchanges are being gradually eased, there could be a recovery in the later quarters. Assuming that economic activities and revenue collections return to full normal by October-December quarter, the most optimistic scenario could still leave the state with a revenue shortfall of at least Rs 17,000 crore, or 25%, Mishra said in a report presented at the webinar held on Saturday.
Several political leaders, including Odisha Congress President Niranjan Patnaik and Member of Parliament Bhartuhari Mahtab, endorsed the suggestions made by experts.
Odisha Alochana Chakra founder Rajesh Mahapatra said many of the suggestions made at the webinar were pragmatic, relevant and, some of them, out-of-the-box ideas.