BHUBANESWAR: As the economy is all set to brace a major contraction due to prolonged lockdown, Odisha is expected to face a shortfall of around Rs 11,313 crore revenue from the 2020-21 Budget estimate.

A recent study by Orissa Economics Association (OEA), a State-level body of economists, warned that Odisha’s economy would contract by at least 13 per cent (pc) and the total additional liability of the State for the year would be around eight pc of the Gross State Domestic Product (GSDP).

The policy document, COVID-19 and the Economy of Odisha: Challenges and the Way Forward, focuses specifically on negative economic impact of virus in Odisha and the policy measures that can be taken to mitigate it.

It forecasts that while the State’s own revenue will decline significantly, the flow of funds from the Centre will fall. Except for the revenue from mining, quarrying and land resources, revenue from all other sources will fall significantly.

OEA secretary Amarendra Das said although the aggregate flow of funds from the Centre to the State has increased compared to that of last year, it has declined by seven pc under share tax. “The State’s collection of own revenue in the first quarter is going to contract by at least 70 to 75 pc,” he claimed.

The credit deposit ratio (CDR) in Odisha, Das said, was only 39 pc against the national average of 76 pc last fiscal. It seems that the semi-urban people in Odisha are in more disadvantageous position than the rural and urban areas, he said.

The CDR is only 33 pc in semi-urban areas, 36 pc in rural pockets and 43 pc in urban areas. The abysmally low CDR in the State speaks volumes about both the demand and supply side of the credit.

The experts also advised that the projects announced for tourism sector and development around Jagannath temple at Puri and Lingaraj temple at Bhubaneswar be put on hold for the year as the sector is going to be severely affected in 2020-21. But the hospitality industry may need tax relief to remain in business.

Financial forecast

As per survey, Odisha economy would contract by at least 13 per cent

Total additional liability of State for the year would be around eight pc of GSDP

Except for revenue from mining, quarrying and land resources, revenue from all other sources will fall

State’s collection of own revenue in first quarter is going to contract by 70 to 75 per cent