1. An Analysis of Orissa (India) Budget during 1990- 91 to 2008-09 Pravas Mishra, Programme Manager, CYSD, India pravas@cysd.org

2. Population: 36 million, 3.57 percent of Indian population (11th most populous state in India) Nearly 85 percent live in rural areas, 22.1 percent are tribal belonging to 62 ethnic communities; 16.5 percent constitute scheduled castes The poverty rate is 47.15 percent, in tribal locations the rate is 84 percent Per capita income: 12,388INR (current prices) The state ranks 11 in Human Development Index ranking out of 15 major states in India (Value: 0.404)

3. Literacy rate : 63.08 percent (M – 76.1 and F – 51) Literacy rate in tribal districts is 30 – 35 percent Infant mortality rate is 75 in Orissa contrary to 58 at the national level. 54.4% of the children are undernourished 76% depend on agriculture Agriculture alone provides direct/indirect employment to around 65% of the total workforce (2001 census).

4. Policy Declarations vs. Budget Allocation Regional Disparity in Fund Allocation and Development Indicators among states Inadequate Devolution of Resources to Grass root institutions Lack of Systematic Research on Budgetary Allocation and Expenditure Absence of Civil Society Participation in Budget Process

5. Development of Data Base of Orissa State Budget Engagement with the Legislators and Budget Makers of the State Development of a Preliminary Resource Base on the State Budget Analysis Created a space for the citizens to have a dialogue with the state

6. Commitment of the state on macro level fiscal fronts Implications of the macro level fiscal corrections on the social sector expenditures of the state

7. Data analysis was made from the secondary sources such as the published budget documents of government of Orissa, Reserve Bank of India, Economic survey of different years. Pre-reform and post reform phase were considered basing on the initiation of the fiscal reform of the Government. The financial years 2008-09 and 2009- 10 were not taken because these two years are having revised and estimated data. Compounded Annual Growth Rate(CAGR) is calculated by using SPSS i.e. log(Dependent variable) = a + b(Independent variable) CAGR = (Antilog( b) -1) X 100 Elasticity is calculated by using regression coefficient through SPSS

8. Revenue deficit was lowest during 1990-91 and highest during 1998-99

9. The fiscal deficit was also all-time high at during 1998-99 and the debt as a proportion of GSDP was also highest during that period

10. Initiated during 1999 with the advice of the union government of India and 11 th and 12 th Finance commission of India Targets were fixed with regard to indicators - Bringing revenue deficit to zero by 2008-09 - Fiscal deficit to 2.5 percent of GSDP - Interest payment as a percentage of Revenue Receipt 18-20 percent

11. Revenue deficit declined and attained the status of revenue surplus during 2005-06

13. Decreasing public expenditure

14. CAGR of GSDP is less during the post reform in compared to the pre-reform reflecting slow growth of the economy The growth rate of Total State Expenditure(TSE) lessened during the post reform phase indicating Governments with drawl from investment activities Significant fall in the Social Sector Expenditure(SSE) expressing reduced pro- poor allocation COMPOUNDED ANNUAL GROWTH RATE (CAGR)

15. Improvements observed in growth rate of plan, capital as well as revenue receipts Revenue expenditures significantly reduced during the post reform

16. The elasticity of GSDP and Revenue Receipt is more during the post reform in compared to the pre reform implies that the growth of GSDP during the post reform contributed more towards growth in revenue receipt during the post reform. However, responsiveness of other variables such as the total state expenditure, social sectors expenditure, debt was less during the post reform period. Thus, though the growth in GSDP was observed during the post reform phase, the contribution towards the social sector expenditure and total state expenditure was less.

17. YearTotal State ExpenditureGSDPPercentage of TSE to GSDP 1990-913091.441090428.35 1991-923640.611401225.98 1992-933914.951513825.86 1993-944455.11861323.94 1994-954981.962240322.24 1995-965562.32711820.51 1996-976310.392650423.81 1997-986854.373223521.26 1998-998642.313558124.29 Pre-reform24.03 1999-0010209.664291023.79 2000-0111047.384349325.40 2001-0212064.744694625.70 2002-0313266.615022326.42 2003-0415564.996142225.34 2004-0515885.87142822.24 2005-0615746.367895319.94 2006-0719345.999337420.72 2007-0822844.3310646621.46 Post-reform23.45

18. Period Pre- reform (1990-91 to 1998-99) Post -Reform (1999- 00 to 2007-08) Whole (1990-2008) GSDP15.61313.2 Total State Expenditure12.710.912.2 Plan Expenditure9.19.67.6 Development Expenditure 10.98.99.4 Capital Expenditure5.712.56.7 Total social sector expenditure 13.57.610.9 Revenue Receipt10.217.813.5 Revenue Expenditure14.69.612.5 Debt15.69.614.3

19. Dependent Variable Independent Variable Pre-reformPost Reform Revenue ReceiptGSDP0.661.33(elastic) Revenue expenditure0.910.75 Total State Expenditure0.800.75 Total Social Sector Expenditure 0.850.75 Debt0.970.70 Revenue Receipt Total state expenditure 0.791.69 Debt1.200.92 *Elasticity > 1: Elastic, <1: Inelastic, = 1: Unitary elastic Elasticity of Variables

20. Thank you