The Chief Minister of Odisha, Mr. Mohan Charan Majhi, presented the Budget for the state for the financial year 2024-25 on July 25, 2024.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of  Odisha for 2024-25 (at current prices) is projected to be Rs 9.26 lakh crore, amounting to growth of 11.2% over 2023-24.

  • Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 2,43,908 crore, an increase of 15% over the revised estimates of 2023-24.  In addition, debt of Rs 21,092 crore will be repaid by the state.

  • Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 2,11,505 crore, an increase of 13% as compared to the revised estimate of 2023-24.  The state has also budgeted Rs 11,000 crore as net receipts from the public account.

  • Revenue surplus in 2024-25 is estimated to be 3% of GSDP (Rs 27,437 crore), higher than the revised estimates for 2023-24 (2.7% of GSDP).  In 2023-24, as per revised estimates, the revenue surplus is expected to be lower than the budget estimate (3% of GSDP).

  • Fiscal deficit for 2024-25 is targeted at 3.5% of GSDP (Rs 32,403 crore).  In 2023-24, as per the revised estimates, fiscal deficit is expected to be 3% of GSDP, similar to the budget estimate for 2024-25.

Policy Highlights

  • Subhadra Yojana: An amount of Rs 10,000 crore has been earmarked for the new scheme Subhadra Yojana. 

  • Samrudh Krushak Yojana: Paddy will be procured from farmers for Rs 3,100 per quintal, higher than the Minimum Support Price of Rs 2,300.  Rs 5,000 crore has been allocated for this purpose under the Samrudh Krushak Yojana.

  • Filling vacancies in government posts: Over five years, 1.5 lakh vacant government posts will be filled. Recruitment for 65,000 of these posts will be completed in the first two years.

  • Madho Singh Haath Kharcha: To address high dropout rates among students belonging to Scheduled Tribes, students taking admission in 9th and 11th grade will be provided Rs 5,000 annually.  Rs 156 crore has been earmarked for this scheme.

Odisha’s Economy

  • GSDP:  In 2023-24, Odisha’s GSDP (at constant prices) grew at 8.5%, compared to 7.9% in 2022-23.  In comparison, national GDP is estimated to grow at 8.2% in 2023-24.

  • Sectors: The agriculture sector grew by 5.8% in 2023-24.  In comparison, it had witnessed 8.1% growth in 2022-23.  Manufacturing sector grew by 8.7% in 2023-24, compared to 7.2% in 2022-23.  Services grew by 9.2% in 2023-24, compared to 7.5% in 2022-23.

  • In 2023-24, agriculture, manufacturing, and services sectors are estimated to contribute 30%, 34%, and 36% to the economy, respectively (at current prices).

  • Per capita GSDP:  The per capita GSDP of Odisha in 2023-24 (at current prices) is estimated at Rs 1,79,303, an increase of 10% over 2022-23.

Figure 1: Growth in GSDP and sectors in Odisha at constant prices (2011-12)

Note: Agriculture also includes mining and quarrying; manufacturing includes construction, and electricity, gas, water, and other utility services.  These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation.
Sources: MOSPI; PRS.

                                                                                                           

Budget Estimates for 2024-25

  • Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 2,43,908 crore.  This is an increase of 15% over the revised estimate of 2023-24.  This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,11,505 crore, net borrowings of Rs 21,403 crore, and net receipts from the public account of Rs 11,000 crore.  Net receipts for 2024-25 (other than borrowings and receipts from the public account) are expected to register an increase of 13% over the revised estimate of 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 3% of GSDP (Rs 27,437 crore), higher than the revised estimates for 2023-24 (2.7% of GSDP).  Fiscal deficit for 2024-25 is targeted at 3.5% of GSDP (Rs 32,403 crore), higher than the revised estimates for 2023-24 (3% of GSDP).

Table 1: Budget 2024-25 - Key figures (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Total Expenditure

1,80,440

2,30,000

2,30,000

0.0%

2,65,000

15%

(-) Repayment of debt

13,927

18,786

18,423

-1.9%

21,092

14%

Net Expenditure (E)

1,66,513

2,11,214

2,11,577

0.2%

2,43,908

15%

Total Receipts

1,56,641

2,19,000

2,19,000

0.0%

2,54,000

16%

(-) Borrowings

5,347

33,630

32,405

-3.6%

42,495

31%

Net Receipts (R)

1,51,294

1,85,370

1,86,595

0.7%

2,11,505

13%

Fiscal Deficit (E-R)

15,219

25,844

24,982

-3.3%

32,403

30%

as % of GSDP

2.0%

3.0%

3.0%

 

3.5%

 

Revenue Surplus

19,456

26,739

22,411

-16.2%

27,437

22%

as % of GSDP

2.6%

3.1%

2.7%

 

3.0%

 

Primary Deficit

9,717

18,603

18,258

-1.9%

26,903

47%

as % of GSDP

1.3%

2.2%

2.2%

 

2.9%

 

GSDP

7,53,177

8,61,000

8,32,790

-3.3%

9,26,000

11%

Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Annual Financial Statement, Odisha Budget 2024-25; PRS.

Expenditure in 2024-25

  • Revenue expenditure for 2024-25 is proposed to be Rs 1,83,563 crore, an increase of 13% over the revised estimate of 2023-24.  This includes the expenditure on salaries, pensions, interest, grants, and subsidies.

  • Capital outlay for 2024-25 is proposed to be Rs 58,195 crore, an increase of 26% over the revised estimate of 2023-24.  Capital outlay indicates the expenditure towards creation of assets. 

  • In 2024-25, loans and advances by the state are expected to be Rs 2,150 crore, 8% lower than the revised estimates of 2023-24. 

Increase in subsidy expenditure

In 2024-25, the total subsidy expenditure of the state is estimated to be Rs 7,767 crore, 107% higher than the revised estimates of 2023-24.  This increase is due to the newly announced Samrudha Krushak Yojana, which has been allocated Rs 5,000 crore.  Note that the total subsidy expenditure does not include expenditure on the Subhadra Yojana.

The state is extending subsidies to incentivise agriculture and industry.  Some of the key subsidies are (i) interest subvention for providing crop loans to farmers (with an estimated outlay of Rs 830 crore in 2024-25), (ii) crop insurance (Rs 600 crore), (iii) subsidies to small, medium, and large industries (Rs 206 crore), and (iv) incentives for adaptation of electric vehicles (Rs 150 crore).

Table 2:  Expenditure budget 2024-25 (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Revenue Expenditure

1,31,006

1,57,761

1,63,089

3%

1,83,563

13%

Capital Outlay

33,349

51,683

46,152

-11%

58,195

26%

Loans given by the state

2,158

1,770

2,335

32%

2,150

-8%

Net Expenditure

1,66,513

2,11,214

2,11,577

0.2%

2,43,908

15%

Sources:  Annual Financial Statement, State Budget 2024-25; PRS.

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.  A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital outlay.  In 2024-25, Odisha is estimated to spend Rs 60,011 crore on committed expenditure, which is 28% of its estimated revenue receipts.  This comprises spending on salaries (15% of revenue receipts), pension (10%), interest payments (3%). 

Table 3: Committed Expenditure in 2024-25 (in Rs crore)

Committed Expenditure

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Salaries

NA

NA

NA

-

32,571

-

Pension

18,596

19,980

19,980

0%

21,940

10%

Interest payment

5,502

7,241

6,724

-7%

5,500

-18%

Total Committed Expenditure

24,099

27,220

NA

 

60,011

 

Notes: NA for data not available.
Sources: Budget Speech, Annual Financial Statement, Economic Survey, Odisha Budget 2024-25; PRS.

Sector-wise expenditure: The sectors listed below account for 74% of the total expenditure on sectors by the state in 2024-25.  A comparison of Odisha’s expenditure on key sectors with that by other states is shown in Annexure 1.

Table 4: Sector-wise expenditure under Odisha Budget 2024-25 (in Rs crore)

Sector

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Budget Provisions 2024-25 BE

Education, Sports, Arts, and Culture

25,078

27,593

29,848

32,329

8%

  • Gangadhar Meher Sikhya Manaka Brudhi Yojana has been allocated Rs 409 crore.
  • Panchasakha Sikhya Setu Abhiyan has been allocated Rs 332 crore.

Social Welfare and Nutrition

9,216

12,760

13,467

28,144

109%

  • Rs 10,000 crore has been allocated towards the Subhadra Yojana.
  • Mukhyamantri Sampoorna Prushti Yojana has been allocated Rs 554 crore.

Transport

13,515

17,730

18,104

22,983

27%

  • Rs 15,865 crore has been allocated as capital outlay on roads and bridges.
  • Rs 1,085 crore has been allocated for Gramanchal Paribahan Yojana.

Health and Family Welfare

12,318

15,933

16,274

21,099

30%

  • Gopabandhu Jana Arogya Yojana has been allocated Rs 5,374 crore.  Of this, Rs 833 crore has been allocated for Niramaya (free medicines), Rs 350 crore for emergency ambulance services, and Rs 236 crore for NIDAN (free diagnostic services).

Agriculture and Allied Activities

11,188

12,671

14,267

19,539

37%

  • Rs 5,000 crore has been allocated for Samrudha Krushaka Yojana.
  • Rs 1,935 crore has been allocated for CM-KISAN.

Rural Development

10,196

14,795

19,384

17,685

-9%

  • Rs 1,990 crore has been allocated towards the Setu Bandhan Yojana.

Irrigation and Flood Control

10,233

11,536

14,238

14,286

0.3%

  • The Lower Suktel Irrigation Project has been allocated Rs 370 crore.
  • Rs 100 crore has been allocated for Gangadhar Meher Lift Canal System.

Water Supply and Sanitation

5,788

13,025

9,517

11,404

20%

  • Rs 2,000 crore has been allocated for the BASUDHA scheme.

Urban Development

3,644

4,906

5,785

6,718

16%

  • Rs 616 crore has been allocated for Pradhan Mantri Awaas Yojana (Urban).
  • Rs 344 crore has been allocated for kalyan mandaps and parks under UNNATI.

Welfare of SC, ST, OBC and Minorities

3,346

4,311

4,485

5,522

23%

  • Rs 200 crore has been allocated for Mukhamantri Janajati Jeebika Mission.
  • Rs 156 crore has been allocated for Madho Singh Haath Kharcha.

% of total expenditure on all sectors

64%

65%

69%

74%

 

 

Sources: Annual Financial Statement, Odisha Budget 2024-25; PRS.

Receipts in 2024-25

  • Total revenue receipts for 2024-25 are estimated to be Rs 2,11,000 crore, an increase of 14% over the revised estimates of 2023-24.  Of this, Rs 1,18,000 crore (56%) will be raised by the state through its own resources, and Rs 93,000 crore (44%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (26% of revenue receipts) and grants (18% of revenue receipts).

  • Devolution:  In 2024-25, the state’s share in central taxes is estimated at Rs 55,232 crore, an increase of 10% over the revised estimates of 2023-24.

  • Grants from the centre in 2024-25 are estimated at Rs 37,768 crore, an increase of 30% over the revised estimates for 2023-24.

  • State’s own tax revenue:  Odisha’s total own tax revenue is estimated to be Rs 60,000 crore in 2024-25, an increase of 11% over the revised estimate of 2023-24.  Own tax revenue as a percentage of GSDP is estimated at 6.5% in 2024-25, similar to the revised estimates for 2023-24 (6.5%).  As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 6.2%.

Table 5: Break-up of the state government’s receipts (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 2023-24 to RE 2023-24

2024-25 Budgeted

% change from RE 2023-24 to BE 2024-25

State's Own Tax

46,554

53,000

54,000

2%

60,000

11%

State's Own Non-Tax

42,720

52,500

52,500

0%

58,000

10%

Share in Central Taxes

42,989

46,251

50,012

8%

55,232

10%

Grants-in-aid from Centre

18,200

32,749

28,988

-11%

37,768

30%

Revenue Receipts

1,50,462

1,84,500

1,85,500

1%

2,11,000

14%

Non-debt Capital Receipts

832

870

1,095

26%

505

-54%

Net Receipts

1,51,294

1,85,370

1,86,595

0.7%

2,11,505

13%

BE is Budget Estimates; RE is Revised Estimates.
Sources: Annual Financial Statement, Odisha Budget 2024-25; PRS.

  • In 2024-25, State GST is estimated to be the largest source of own tax revenue (43% share).  State GST revenue is estimated to increase by 11% over the revised estimates of 2023-24.

  • Revenue from state excise and taxes on vehicles is expected to see an increase of 15% in 2024-25 as compared to the revised estimates for 2023-24.  In 2024-25, land revenue is expected to increase by 33%.

State’s Own Non-tax Revenue

In 2024-25, Odisha’s own non-tax revenue is estimated to be 6.3% of GSDP.  It is estimated to contribute 27% of the state’s total revenue receipts.  Unlike other states, Odisha’s receipts from non-tax revenue are almost as high as its own tax revenue.

84% of non-tax revenue in 2024-25 is estimated to come from mining royalties.  As per revised estimates, mining royalties were 20% higher in 2023-24 than in 2022-23.  In 2024-25, royalties are projected to be 7.6% higher than the revised estimates of 2023-24.  The Fiscal Risk Statement lists volatility in mining revenue as one of the risks to the state’s finances.  Mining revenue is dependent on the price of metals in international markets.  A 20% variation in commodity prices can impact the state revenue by about Rs 10,000 crore.  The state has created a Budget Stabilisation Fund to hedge against such risks.

Table 6:  Major sources of state’s own-tax revenue (in Rs crore)

Head

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

State GST

18,601

22,004

23,500

7%

26,073

11%

Sales Tax/ VAT

12,023

13,273

12,700

-4%

14,212

12%

State Excise

6,455

7,740

7,551

-2%

8,680

15%

Taxes and Duties on Electricity

4,210

3,935

4,246

8%

4,252

0.1%

Taxes on Vehicles

2,133

2,226

2,343

5%

2,700

15%

Stamps Duty and Registration Fees

1,997

2,451

2,197

-10%

2,417

10%

Land Revenue

739

815

719

-12%

954

33%

GST Compensation Grants

1,887

4,157

3,043

-27%

3,000.00

-1%

GST Compensation Loans

 

0.10

0.10

0%

0.10

0%

Sources: Annual Financial Statement, Revenue Budget, and Odisha Budget 2024-25; PRS.

 

Deficits, Debt, and FRBM Targets for 2024-25

The Odisha Fiscal Responsibility Act, 2005 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit and fiscal deficit of the state government.

Revenue surplus:  It is the difference of revenue expenditure and revenue receipts.  A revenue deficit implies that the government needs to borrow to finance those expenses which do not increase its assets or reduces its liabilities.  The budget estimates a revenue surplus of Rs 27,437 crore (or 3% of the GSDP) in 2024-25.

Fiscal deficit: It is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government and leads to an increase in total liabilities.  In 2024-25, the fiscal deficit is estimated to be 3.5% of GSDP.  For 2024-25, the central government has permitted fiscal deficit of up to 3.5% of GSDP to states, of which 0.5% of GSDP will be available only upon carrying out certain power sector reforms.

Financing fiscal deficit

From 2021-22 to 2023-24, Odisha did not opt for open market borrowings.  Loans from funds such as the Odisha Mineral Bearing Area Development Corporation (OMBADC) Fund and the Compensatory Afforestation (CAMPA) Fund were used to finance the deficit.  Loans from these funds is availed at a lower interest rate compared to open market borrowing rates.  This has kept the interest payment obligations of the state low.  Interest payments have been less than 6% of revenue receipts since 2021-22.

In 2024-25, open market borrowing is estimated to constitute 36% of the state’s total borrowing.  Borrowings from the OMBADC and CAMPA funds will constitute 31% of total borrowing. 

As per the revised estimates, in 2023-24, the fiscal deficit of the state is expected to be 3% of GSDP.  This is similar to the budget estimate for the year.  Fiscal deficit is projected to be lowered to 3.1% of GSDP by 2026-27.

Outstanding liabilities:  Outstanding liabilities is the accumulation of total borrowings at the end of a financial year, it also includes any liabilities on public account.  At the end of 2024-25, the outstanding liabilities are estimated to be 13.6% of GSDP, higher than the revised estimate for 2023-24 (12.4% of GSDP).  The outstanding liabilities was 17.3% of GSDP in 2019-20, and 19.3% of GSDP in 2020-21.  It then moderated to 12.4% in 2023-24.  However, it is projected to increase to 15.7% of GSDP by 2026-27.

Figure 2: Revenue and Fiscal Balance (% of GSDP)

 

Note: *Figures for 2025-26 and 2026-27 are projections; For 2020-21 and 2021-22, deficits reported without treating GST compensation loans as grants.  RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy, Odisha Budget 2024-25; PRS. 

Figure 3: Outstanding Liabilities (as % of GSDP)

Note: *Figures for 2025-26 and 2026-27 are projections; For 2020-21 and 2021-22, deficits reported without treating GST compensation loans as grants.
Sources: Medium Term Fiscal Policy, Odisha Budget 2024-25; PRS.

Outstanding Government Guarantees: Outstanding liabilities of states do not include a few other liabilities that are contingent in nature, which states may have to honour in certain cases.  State governments guarantee the borrowings of State Public Sector Enterprises (SPSEs) from financial institutions.  As of March 31, 2024, the state’s outstanding guarantee is estimated to be Rs 3,435 crore, which is 0.41% of Odisha’s GSDP in 2023-24.

 

Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Odisha’s expenditure in 2024-25 on six key sectors as a proportion of its total expenditure on all sectors.  The average for a sector indicates the average expenditure in that sector by 31 states (including Odisha) as per their budget estimates of 2023-24.[1]

  • Education: Odisha has allocated 13.4% of its expenditure towards education in 2024-25.  This is lower than the average allocation for education by states in 2023-24 (14.7%).

  • Health:  Odisha has allocated 8.7% of its total expenditure towards health, which is higher than the average allocation for health by states (6.2%).

  • Housing:  Odisha has allocated 0.7% of its expenditure towards housing.  This is lower than the average allocation for housing by states (1.7%).

  • Water supply and sanitation:  Odisha has allocated 4.7% of its expenditure towards water supply and sanitation.  This is higher than the average allocation towards water supply and sanitation by states (2.7%).

  • Agriculture:  Odisha has allocated 8.1% of its total expenditure towards agriculture, which is higher than the average expenditure on agriculture by states (5.9%).

  • Welfare of SC, ST, OBC:  Odisha has allocated 2.3% of its total expenditure towards Welfare of SC, ST, OBC, which is lower than the average allocation by states (3.5%).

Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Odisha.
Sources: Annual Financial Statement, Odisha Budget 2024-25; various state budgets; PRS.

[1] The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry .

Annexure 2:  Comparison of 2022-23 Budget Estimates and Actuals

The following tables compare the actuals of 2022-23 with budget estimates for that year.

Table 7: Overview of Receipts and Expenditure (in Rs crore)

Particular

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Net Receipts (1+2)

1,64,411

1,51,294

-8%

1. Revenue Receipts (a+b+c+d)

1,63,967

1,50,462

-8%

a. Own Tax Revenue

46,000

46,554

1.2%

b. Own Non-Tax Revenue

48,200

42,720

-11%

c. Share in central taxes

36,978

42,989

16%

d. Grants-in-aid from the Centre

32,789

18,200

-44%

     Of which GST compensation grants

6,226

1,887

-70%

2. Non-Debt Capital Receipts

444

832

87%

3. Borrowings

24,589

5,347

-78%

      Of which GST compensation loan

0

0

 

Net Expenditure (4+5+6)

1,85,999

1,66,513

-10%

4. Revenue Expenditure

1,45,727

1,31,006

-10%

5. Capital Outlay

38,732

33,349

-14%

6. Loans and Advances

1,539

2,158

40%

7. Debt Repayment

14,001

13,927

-0.5%

Revenue Balance

18,239

19,456

7%

Revenue Balance (as % of GSDP)

2.5%

2.6%

 

Fiscal Deficit

21,588

15,219

-30%

Fiscal Deficit (as % of GSDP)

3.0%

2.0%

 

Source: Odisha Budget Documents of various years; PRS.

Table 8: Key Components of State's Own Tax Revenue

Tax Source/Head

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

State GST

19,479

18,601

-5%

Stamps Duty and Registration Fees

2,010

1,997

-0.6%

State Excise

6,496

6,455

-0.6%

Taxes on Vehicles

2,103

2,133

1.4%

Sales Tax/ VAT

11,208

12,023

7%

Taxes and Duties on Electricity

3,789

4,210

11%

Land Revenue

610

739

21%

Source: Odisha Budget Documents of various years; PRS.

Table 9: Allocation towards Key Sectors

Sector

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Water Supply and Sanitation

11,048

5,788

-48%

Rural Development

14,298

10,196

-29%

Urban Development

4,580

3,644

-20%

Social Welfare and Nutrition

11,341

9,216

-19%

Housing

1,130

936

-17%

Welfare of SC, ST, OBC, and Minorities

3,880

3,346

-14%

Transport

15,509

13,515

-13%

Agriculture and Allied Activities

12,128

11,188

-8%

Police

4,360

4,042

-7%

Irrigation and Flood Control

10,896

10,233

-6%

Health and Family Welfare

12,490

12,318

-1.4%

Education, Sports, Arts, and Culture

24,994

25,078

0.3%

of which Roads and Bridges

11,781

12,426

5%

Energy

2,788

3,129

12%

Source: Odisha Budget Documents of various years; PRS.


 

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