Bhubaneswar, March 31 (NationPress) The Comptroller and Auditor General of India (CAG) announced on Tuesday that Odisha experienced moderate economic growth in 2024–25 in comparison to the prior fiscal year. However, it raised alarms regarding potential fiscal stress due to factors such as insufficient revenue realisation, weak own-tax collection, inadequate dividend receipts, lingering loan obligations, and significant repayment duties.

The State Finances Audit Report for the Odisha government, presented in the State Assembly, indicated that the overall fiscal condition of the state remained stable, characterised by controlled deficits, manageable debt levels, and a continued revenue surplus.

Despite this stability, the report highlighted potential fiscal threats that, if ignored, could severely limit the state’s ability to engage in development and capital investment.

It was reported that Odisha's economy achieved a moderate growth rate of 11.4 percent in FY 2024-25 compared to the previous fiscal year.

Moreover, the Gross State Domestic Product (GSDP) at current prices grew at a compound annual growth rate of 13.3 percent, rising from Rs 5,40,185 crore in 2020-21 to Rs 8,90,038 crore in 2024-25.

In 2024–25, the state recorded a revenue surplus of Rs 22,651 crore (2.54 percent of GSDP).

The fiscal deficit was noted at Rs 25,042 crore (2.81 percent of GSDP), remaining comfortably within the three percent GSDP ceiling.

Total liabilities were recorded at 15.48 percent of GSDP, significantly below the allowable limit of 25 percent.

While revenue receipts grew by 2.43 percent to Rs 1,83,963 crore in 2024–25, the report indicated a decline in revenue buoyancy to 0.21 percent and own tax buoyancy to 0.02 percent, demonstrating a troubling lag in revenue generation relative to economic growth.

This situation underscores a significant weakness in the state’s tax mobilisation capabilities.

Additionally, the report expressed concerns regarding escalating subsidy expenditure, which rose sharply to Rs 9,134 crore in 2024-25. This amount exceeded the budget estimate of Rs 8,068 crore and represented a staggering increase of Rs 5,011 crore (121.54 percent) compared to the previous year, largely driven by major welfare initiatives.

Another issue highlighted was the failure of State Public Sector Enterprises to remit dividends.

According to the state's dividend policy, State Public Sector Undertakings (SPSUs) are required to pay annual dividends to the state government, calculated as 30 percent of either their Profit After Tax (PAT) or the state government’s equity, whichever is higher. The report noted that 27 SPSUs, despite reporting profits, failed to pay Rs 5,146.76 crore in required dividends to the state government as per the Finance Department's instructions.

Furthermore, a high concentration of liabilities amounting to Rs 76,642 crore (56 percent) is due within the next seven years, creating refinancing and liquidity challenges for the state budget.

While debt sustainability showed improvement until 2022–23, it has since weakened, highlighting the necessity for fiscal prudence and aligning debt growth with GSDP to guarantee long-term sustainability.

The CAG also pointed to inaccuracies in assessing requirements and inadequate capacity for utilizing budget allocations effectively.

Audits revealed instances of inflated provisions, incorrect proposals, unwarranted enhancements, unrealistic budgeting, and unnecessary supplementary allocations, resulting in continued underutilization and surrender of funds.