Odisha has budgeted fresh borrowings of ₹46,400 crore for 2025–26, reflecting a 9 percent increase over the previous year’s budget estimate of ₹42,495 crore. While the headline borrowing figure appears elevated, the broader fiscal framework suggests a calibrated expansion aligned with capital investment rather than revenue stress.
The state’s total budget outlay stands at ₹2.90 lakh crore, supported by projected revenue receipts of ₹2.32 lakh crore. With revenue expenditure estimated at ₹2,00,200 crore, Odisha is expected to maintain a revenue surplus of ₹31,800 crore. This surplus indicates that routine obligations such as salaries, pensions and interest payments are being financed from current revenue, limiting reliance on debt for day-to-day operations.
Borrowing must be viewed alongside capital expenditure, which has been budgeted at ₹89,800 crore. Notably, the planned borrowing of ₹46,400 crore covers roughly 52 percent of capital expenditure, implying that nearly half of the asset-creating expenditure is financed through internal revenue strength and other receipts. This composition reduces structural vulnerability.
The fiscal deficit for 2025–26 is projected at ₹34,200 crore, remaining within permissible fiscal responsibility limits. Interest payments are budgeted at ₹6,500 crore, representing a modest share of total expenditure, which suggests manageable debt servicing pressure in the near term.
Based on cumulative borrowing patterns and recent fiscal trends, total outstanding liabilities are estimated to be in the range of ₹1.8 to ₹2.0 lakh crore. However, debt sustainability depends less on absolute size and more on economic capacity. Odisha’s debt-to-GSDP ratio is estimated in the range of 13 to 15 percent, well below the prudential threshold of 25 percent under fiscal norms, positioning the state among the relatively stable sub-national balance sheets in the country.
The real test lies in execution efficiency. If capital allocations translate into productive infrastructure and revenue buoyancy sustains current momentum, incremental borrowing may reinforce growth rather than strain the balance sheet. Borrowing expansion without revenue backing signals stress. Borrowing supported by revenue surplus and capital formation signals strategy. The 2025–26 budget suggests Odisha is pursuing the latter path.
