In an effort to create more fiscal space to finance higher capital outlay and takeover the debt burden of PSUs, the state government on Monday decided to suitably amend the Odisha Fiscal Responsibility and Budget Management (FRBM) Act, 2005.
A proposal in this regard was approved at the cabinet meeting presided over by Chief Minister Naveen Patnaik. The amendment is being made as per the flexibility provided by the 14th Finance Commission in its Fiscal Consolidation Roadmap to set the fiscal deficit targets and annual borrowing, Chief Secretary A P Padhi said.
Stating that the amendment would create space to go for big borrowing in order to enhance capital outlay, Padhi said fiscal deficit of the state will be anchored to an annual limit of 3 per cent of the GSDP.
"The state will be further eligible for an additional borrowing limit of 0.25 per cent of the GSDP in a given year for which the borrowing limits are to be fixed if the interest payments are less than or equal to 10 per cent of the revenue receipt in the preceding year," Padhi said.
Therefore, the chief secretary said, the state can have a maximum fiscal deficit-GSDP limit of 3.5 per cent in any given year. The flexibility in availing the additional limit under either of the two options or both will be available to the state only if there is no revenue deficit in the year in which borrowing limits are to be fixed and the immediately proceeding year, he said.
"Odisha fulfils both the conditions and thus qualifies for additional borrowing ceiling of 0.5 per cent. Our state needs the additional fiscal space to finance higher capital outlay to foster economic growth," Padhi said.
This apart, the chief secretary pointed out that the scheme Ujwal DISCOM Assurance Yojana (UDAY) has been launched by the Ministry of Power with an objective to turnaround the finance of state owned power distribution companies (DISCOMs) to improve operational and financial efficiency.
The scheme necessitates that 75 per cent of the DISCOMs’ debt as on September 30, 2015 will be taken by the state over two/three years.
The cabinet also approved five other proposals including constitution of the regular Food Commission as per the provision of the National Food Security Act.
Initially for implementation of the Act from November 2015, the state government had designated the State Information Commission (SIC) as Odisha State Food Commission and Project Director, DRDA in the districts as District Grievance Redressal Officer during October 2015.
The Cabinet meeting also approved a proposal to nominate Sulabh International Social Service Organisation as implementing agency on pilot basis for design, built, operate and maintain and transfer of hybrid toilets in nine AAMRUT towns like Bhubaneswar, Cuttack, Berhampur, Sambalpur, Rourkela, Puri, Balasore, Bhadrak and Baripada.