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 9^th and 11^th 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.

                                                                                                           

• 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.

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.

• 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.

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.

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.