Reduced allocation from central pool likely to affect Odisha budget

BHUBANESWAR: As allocation to Odisha has been slashed from the Centre's divisible pool, officials in the state finance department said the reduced allocation is likely to affect the state budget for 2020-21 financial year.
Odisha is likely to receive Rs 36,300 crore from the Centre's divisible pool according to the recommendations of the 15th Finance Commission in the coming 2020-21 financial year. This came to fore after the Union Budget was tabled on Saturday, said a finance department official.
According to the budget estimate of the current financial year (2019-20), Odisha was supposed to receive over Rs 39,206 crore from the divisible pool, but it was reduced to Rs 30,450 crore in the revised estimate. "If state's share will be reduced from the central pool, it will obviously affect the state budget. The size of the state budget is likely to be reduced," said a senior finance department official.
Shared tax from the divisible pool contributes a major portion to meet the state's annual budget estimate.
"State's earnings are limited. We depend on central fund flow from divisible pool and allocations under various centrally-sponsored schemes (CSSs) to meet the budget estimate besides our own incomes from sectors like state excise, VAT, state GST, motor vehicle tax and mining royalty," the finance department official said.
Though the state government is yet to get a clear picture of allocations to the state under various CSSs in the Union Budget for 2020-21, finance department sources said the allocation is not encouraging.
Under drinking water project, the Centre has allocated only Rs 11,500 crore nationally against the Rs 3.6 lakh crore project. "The allocation is meagre as Odisha alone spends about Rs 3,600 crore to strengthen drinking water system in the state," the official said.
Chief minister Naveen Patnaik, in his budget reaction on Saturday, had also expressed concern over low allocation under the drinking water project.
Similarly, allocation under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been reduced by around 13% for 2020-21 year as compared to the current 2019-20 financial year. The Centre has allocated Rs 61,500 crore under the rural job scheme for the next financial year compared to Rs 71,000 crore in the current year, going by Union Budget.
The state government has asked all departments to coordinate with their ministries concerned in the Union government to get a clear picture on allocation of funds under various CSSs.
Based on the allocation of shared tax and CSSs in the Union based, the state finance department has started shaping up its budget for 2020-21 fiscal year. Finance minister Niranjan Pujari will table the state budget on February 18.