Odisha spends only 25% of capital outlay, 33% of annual estimate by Sep | Economy & Policy News

Despite ballooning budget estimates, Odisha’s capital expenditure remained at just 25.2 per cent of the annual allocation, while overall expenditure reached only 33.4 per cent by September, exposing a persistent gap between budgetary ambitions and actual spending.

 

The sluggish expenditure came against the backdrop of an audit by the Comptroller and Auditor General (CAG) of India flagging Rs 2,36,868.57 crore remaining unspent or surrendered over five financial years.

 

According to data presented by the Finance department during a recent meeting of all secretaries, Odisha incurred total expenditure of Rs 94,463 crore, excluding debt servicing and disaster management, up to September this year. The total size of the budget for FY27 was Rs 3.1 trillion. Of the estimated Rs 1.8 trillion in programme expenditure, only Rs 58,508 crore had been spent.

  

There was little improvement in capital expenditure, with only Rs 18,183 crore spent during the first six months against the estimated capital outlay of Rs 72,100 crore for 2026-27. The amount spent so far remains only about a quarter of the annual allocation. Similarly, establishment, operations and maintenance (EOM) expenditure dropped by around 4.1 per cent in absolute terms during the period compared with the previous year.

 

Officials said that, since nearly three-fourths of the annual provision remained to be spent in the second half of the financial year, this would put pressure on departments to accelerate project execution, tendering, procurement, land acquisition and payments to contractors to avoid a year-end rush or the surrender of funds.

 

According to the CAG report on state finances, the state underspent its capital outlay and overall budget by an average of 17 per cent and 20 per cent, respectively, between 2020-21 and 2024-25. Odisha’s total budget increased by 71.64 per cent, from Rs 1,67,663 crore in 2020-21 to Rs 2,87,770 crore in 2024-25. Yet, savings against budgetary provisions remained between 17.7 per cent and 25.98 per cent during the five-year period.

 

A recurring pattern of large savings also raises questions about the basis on which departmental allocations are projected. The scale of unspent allocations over the five-year period is significant because the state has continued to expand its budgetary commitments, which reached Rs 3.1 trillion in 2026-27.

 

Economists said the persistent gap between planned and actual budget spending raises questions about the realism of budget estimates and departments’ capacity to execute programmes at the pace envisaged. Amarendra Das, associate professor at the National Institute of Science Education and Research (NISER), said expenditure remained below projections largely because of vacancies across government departments and delays in the transfer of central funds.

 

“If Odisha aims to achieve its $1.5 trillion economy target by 2047, it must have a long-term plan for public expenditure. At present, several senior bureaucrats are handling multiple departments, while large-scale vacancies have weakened administrative capacity. The government should immediately fill these vacancies to strengthen the departments’ ability to execute projects and utilise allocated funds,” Das said.

 

Meanwhile, Chief Secretary Anu Garg has advised all departments to closely monitor and accelerate expenditure under both administrative and programme expenditure, with particular emphasis on increasing programme and capital expenditure. As the next six months constitute the major working season, all engineering departments have been asked to expedite implementation to achieve at least 10 per cent growth in expenditure during the period.

 

“Secretaries will have to identify the bottlenecks relating to appraisal by the committees concerned, DPR preparation, tender finalisation and Cabinet approval, and resolve them on priority. They have been asked to monitor progress closely at their level and fix accountability for avoidable delays,” said an official who attended the meeting.