Bhubaneswar: The Odisha government has been able to steer the state’s economy quite well, recording a surplus budget (negative fiscal deficit) in the first quarter of the current financial year amidst the COVID-19 pandemic, according to an Ecoscope report published by Motilal Oswal Institutional Equities.
A look at the states’ finances in Q1 of FY20-21 shows the fiscal deficit of 14 states — accounting for nearly 63 per cent of all states — stood at 37 per cent of budget estimate (BE) for the said quarter. This is more than double the average of 16 per cent seen during the previous three years and 14 per cent average during the previous five years, said the report.
Odisha was the only state to post growth — collection of taxes, stamp duties and registration charges in Q1. As for the rest of the states, there was a fall of 58 per cent with the decline ranging from 89 per cent in Jharkhand to 25 per cent in Chhattisgarh.
Due to the lockdown imposed on account of COVID-19, total taxes collected by the states — including devolution from the Centre which accounted for 64 per cent of all receipts — declined by almost one-third in Q1.
The fiscal deficit was around 70 per cent of budget estimate in Kerala and Andhra Pradesh, and more than 50 per cent in Telangana in the first quarter. In contrast, Jharkhand, Himachal Pradesh, Odisha and Uttarakhand posted a fiscal surplus in the same period.
The fiscal deficit rose on the back of a severe fall in revenue as the spendings were subdued. The monthly accounts available for 14 states showed that total receipts of the states fell 18.2 per cent in Q1, while total spending grew by just 2.7 per cent in the quarter.
The 14 states include Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Odisha, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand.
