Odisha: The Comptroller and Auditor General of India (CAG) on Tuesday stated that Odisha achieved robust growth in 2024-25 compared to the previous fiscal year. It also warned of fiscal stress risks stemming from lower revenue receipts, lower own tax collections, poor dividend collections, long-standing loans, and short- to medium-term payment obligations.
The Odisha government’s State Finance Audit Report for 2024-25, presented in the State Assembly, stated that the state’s overall fiscal position remained stable, with a controlled deficit, manageable debt, and a consistent revenue surplus.
However, the report identified various fiscal risks, stating that if left unaddressed, these could severely impair the state’s development and capital expenditure capabilities.
It stated that Odisha’s economy recorded a healthy growth (11.4 percent) in FY 2024-25 compared to the previous year. Similarly, the Gross State Domestic Product (GSDP) at current prices grew at a compound annual growth rate of 13.3 percent, from ₹5,40,185 crore in 2020-21 to ₹8,90,038 crore in 2024-25.
According to the report, in 2024-25, the state recorded a revenue surplus of ₹22,651 crore (2.54 percent of GSDP).
The fiscal deficit stood at ₹25,042 crore (2.81 percent of GSDP), remaining within the prescribed limit of three percent of GSDP.
Total liabilities were 15.48 percent of GSDP, well below the target limit of 25 percent. The CAG noted that although revenue receipts (₹1,83,963 crore) increased by 2.43 percent in 2024-25, revenue buoyancy and the state’s own tax buoyancy declined to 0.21 percent and 0.02 percent, respectively, indicating that revenue generation is not keeping pace with economic growth.
This reflects a serious weakness in the state’s tax collection capacity.
The report also expressed concern over rising subsidy expenditure, which increased sharply to ₹9,134 crore in 2024-25, exceeding the budget estimate of ₹8,068 crore, and increased by ₹5,011 crore (121.54 percent) over the previous year due to flagship welfare schemes.
Another concern raised in the report is the failure of state public sector enterprises to remit dividends.
The report states, “As per the state’s dividend policy, State Public Sector Undertakings (SPSUs) were required to pay an annual dividend to the state government, which was 30% of either profit after tax (PAT) or state government equity, whichever is higher. However, it was found that 27 SPSUs, despite reporting PAT, did not remit Rs 5,146.76 crore of the required dividend to the state government as mandated by the Finance Department.”
The report also states that the excess liabilities of Rs 76,642 crore (56%) over the next seven years puts refinancing and liquidity pressure on the state budget.
Although debt sustainability improved until 2022-23, it weakened thereafter due to rising debt and persistent primary deficit, highlighting the need for fiscal prudence and alignment of debt growth with GSDP to ensure long-term sustainability.
The CAG pointed to incorrect assessment of needs and significant utilization capacity for provisions made in the annual budget.
The audit found instances of inflated provisions, incorrect proposals, arbitrary increases without justification, unrealistic budgeting, and unnecessary supplementary allocations, leading to persistent underutilization and fund surrender.
