Bhubaneswar: Odisha’s economy recorded moderate growth with 11.40 per cent (pc) in 2024-25 compared to the previous year. The Gross State Domestic Product (GSDP) grew at a Compound Annual Growth Rate of 13.30 pc from Rs 5,40,185 crore in 2020-21 to Rs 8,90,038 crore in 2024-25, states the Comptroller & Auditor General of India (CAG) in its Report No. 3 of 2026. The State Finances Audit Report 2024-25 on Odisha was presented in the Odisha Assembly on Tuesday.
As per the report, the State recorded a Revenue Surplus of Rs 22,651 crore (2.54 pc of GSDP) during 2024-25. The Fiscal Deficit of the State was Rs 25,042 crore (2.81 pc of GSDP), which was well within the stipulated ceiling of 3 pc of GSDP. The total liabilities stood at 15.48 pc of GSDP, significantly below the prescribed limit of 25 pc, the report highlighted.
Similarly, the revenue receipts (Rs 1,83,963 crore) grew by 2.43 pc, with revenue buoyancy and State’s own revenue buoyancy declining to 0.21 and 0.02 respectively, despite higher Union Tax devolution and GSDP growth exceeding 11 pc in the last two years.
The State generated higher Own Tax Revenue (Rs 56,516 crore) in absolute terms, compared to previous year (Rs 54,427 crore) but could not keep pace with the GSDP growth of 11.40 pc. Further, Non-Tax Revenue (Rs 51,221 crore) also decreased by Rs 1,790 crore over the previous year (Rs 53,011 crore) and consequently its share in GSDP (5.75 pc) declined.
Revenue Expenditure
During 2020-21 to 2024-25, the revenue expenditure exceeded 82 pc of revenue receipts (except in 2021-22), reaching 87.69 pc in 2024-25, indicating that most receipts were absorbed by routine spending. However, the committed expenditure declined from 39 pc of revenue receipts in 2020-21 to 32 pc of revenue receipts in 2024-25, creating some fiscal space for developmental expenditure.
On the other hand, subsidy expenditure increased sharply to Rs 9,134 crore in 2024-25, exceeding the budget estimate of Rs 8,068 crore and rising by Rs 5,011 crore (121.54 pc) over the previous year, mainly due to grant of Rs 5,848.70 crore as input assistance under the Samrudh Krushak Yojana.
Capital Expenditure
The Capital Expenditure of the State was Rs 45,481 crore. The share of Capital Expenditure showed positive shift towards asset creation and developmental spending from 16 per cent of Total Expenditure in 2020-21 to 22 per cent in 2024-25.
However, the audit found that the State Government misclassified an expenditure of Rs 721 crore of revenue nature as capital expenditure, which inflated the Capital Expenditure to that extent. Further, test-check of sanction orders revealed that ST & SC Development, Minorities & Backward Classes Welfare department transferred Rs 586.62 crore of capital nature to the personal ledger accounts of ITDAs in the months of February and March 2025, which inflated the reported capital expenditure, as in such cases the actual expenditure may occur much later, leading to misrepresentation of the fiscal position of the State.
Non-remittance of dividends
As per State’s dividend policy, State Public Sector Undertakings (SPSUs) had to pay an annual dividend to the State Government calculated as 30 pc of either the Profit After Tax (PAT) or the State Government’s equity, whichever is higher. It was however, found that 27 SPSUs, despite reporting PAT, did not remit Rs 5,146.76 crore of the required dividends to the Government as mandated by the Finance Department. The Finance Department also failed to raise the necessary demand for these dividends.
Liabilities of Odisha
As of March 2025, overall outstanding liability of the State stood at Rs 1,37,784 crore. There was decline in the debt-GSDP ratio from 22.02 pc in 2020-21 to 15.48 pc in 2024-25. The interest payments relative to revenue fell from 6.36 pc to 2.87 per cent during the period, aided by higher revenue receipts and lower effective interest rates. However, absolute interest obligations remained substantial.
Poor Budget Management
The total budget of Odisha increased by 71.64 pc from Rs 1,67, 663 crore in 2020-21 to Rs 2,87,770 crore in 2024-25. The savings during the same period remained between 17.70 pc and 25.98 pc. During 2024-25, against the total budget provision of Rs 2,87,770 crore, the State incurred an expenditure of Rs 2,31,613 crore, resulting in an overall savings of Rs 56,157 crore (19.50 per cent).
Large savings out of the allotted funds indicated inaccurate assessments of requirements as well as inadequate capacity to utilise the funds for intended purposes, which was substantiated during the comprehensive review of two grants i.e. Grant No. 15 – Sports and Youth Services and Grant No. 17 – Panchayati Raj and Drinking Water. Instances of inflated budget provisions due to submission of erroneous proposal, arbitrary enhancement of budget provision without any recorded justifications, poor budget planning / unrealistic budgeting, under-utilisation of budget provision, unnecessary/ unrealistic supplementary provisions etc., resulting in underutilisation and surrender of funds, were noticed in Audit.
Non-regularisation of Excess Expenditure
As per Article 205 of the Constitution of India, it is mandatory for a State Government to get excesses over grants/appropriations regularised by the State Legislature. It was found that Excess Expenditure of Rs 269.34 crore for previous financial years i.e., 2013-14 to 2023-24, and Rs 117.50 crore for 2024-25, had not been regularised by the State Legislature.
Financial Reporting Practices
The State Government accumulated un-discharged liabilities of Rs 911.97 crore during 2024-25, which included un-discharged interest of Rs 397.84 crore towards Interest bearing Deposits, short/non-transfer of Government’s contribution of Rs 271.71 crore to the National Pension System, non-transfer of Labour Welfare Cess of Rs 1.88 crore to the Building and Other Construction Worker’s Board, non-transfer of Rs 122.81 crore of Cess on Land Revenue to Urban and Local bodies and non-recoupment of Rs 117.73 crore towards Contingency Fund.
Weak Financial Accountability
Similarly, 12,050 utilization certificates (UCs) involving Rs 16,585.45 crore were pending in 2024-25, of which 6,363 UCs (Rs 5,622.03 crore) related to 2003-04 to 2019-20, indicating long-standing delays.
Pending UCs increased by 34 per cent from Rs 12,361.26 crore in 2023-24 to Rs 16,585.45 crore in 2024-25, despite repeated audit observations in CAG’s previous audit reports, reflecting weak financial accountability and monitoring.
Further, no department uploaded UCs in the IFMS UC module even after seven years of its scheduled implementation, indicating a gap between system creation and its operational use.
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