Odisha’s Economy Expected to Grow by 9.5% in 2021-22

Odisha’s economy, which had contracted by about 4.92% in the 2020-21 financial year owing to the devastating impact of Covid-19, is on its road to recovery. A recent communication by state finance secretary Vishal Dev to all departments stated that the state economy is projected to grow by about 9.5% in the current fiscal while it is expected to register a growth of about 9% in 2022-23.

Recovery of the Economy

Stating that there is an optimism in the resource outlook during 2021-22 fiscal owing to the recovery of the economy, the finance secretary, while asking departments to submit proposals for the annual budget by December 15, said the state government has been consistently monitoring the revenue collection with a specific focus on mopping up arrears. In 2019-20 fiscal, growth was around 6% compared to the previous year with the size of the economy (gross state domestic product) at Rs 5.33 lakh crore.

After the contraction in 2020-21, the size of the economy got reduced to around Rs 5.10 lakh crore which is expected to be around Rs 5.80 lakh crore this financial year.

Tax and Non-Tax Revenue

The efforts of the state government in the mining sector have substantially enhanced the overall collection of its own tax and non-tax revenue compared to the previous year. “Considering the year 2020-21 as an aberration, the growth of own tax and non-tax revenue is still modest when compared to the level of collection in 2019-20 and a time lag of two years,” said the finance secretary.

Dev said the receipt of share tax and grant-in-aid from the Centre till August has also declined compared to the previous financial year.

As it has been estimated that the state’s revenues are expected to register moderate growth in the next fiscal, the government has also decided to increase spending in different sectors in the next year.

Even as the state has been fighting the pandemic with a focus on saving life and livelihoods, the finance secretary said the government’s priorities in the medium-term remains faster reduction of poverty, among others.

(Economy India)