Fiscal consolidation of Odisha is on track despite expectation of minor slippages from the state's FY14 budget targets, India Ratings said today.
The state will be able to achieve the 2.03 per cent fiscal deficit target next fiscal, it said.
"We expect minor slippages...However, this will not make any significant impacts on its fiscal profile," the agency said in a report.
The fiscal deficit target in FY14 is achievable, it said, "on the back of the state's demonstrated ability to manage earlier instances of economic under-performance".
The report also noted that the state's tax revenue growth target of 16.39 per cent and the target of restricting revenue expenditure growth to 15.81 per cent would be difficult in the current economic environment.
Odisha presented a revenue surplus budget with outlay of Rs 60,303 crore for FY14, which is nearly 20 per cent higher than the Rs 52,031 crore for FY13 last week.
According to the report, despite the state moving to negative fiscal balance zone in FY13, it remained within the fiscal responsibility legislation (FRL) targets. Advance estimate of real GSDP growth of 9.14 per cent in FY13 may slip due to the larger economic contraction. The state aims to grow at 6.5-7 per cent next financial year.
On the debt front, the report said it expects the state's debt to be Rs 45,516 crore in FY14, which is 15.58 per cent of the GSDP. "The state continued to remain within the set FRL limits of 29.8 per cent for FY14, which is favourable for the state finances," it said.
