Odisha's Revenue Short fall of 2024-25

Projected revenue shortfall drivers for Odisha 2024-25

The projected revenue shortfall drivers for Odisha in the fiscal year 2024-25 primarily include:

1. Volatility and dependency on mining revenue: Odisha's own non-tax revenue, which contributes around 27% of the state's total revenue receipts, relies heavily (84%) on mining royalties. Since mining revenue depends on international metal prices, fluctuations in global commodity prices can significantly impact the state's revenue. A 20% variation in metal prices can affect Odisha's revenue by about Rs 10,000 crore, making mining sector vulnerability a key risk to revenue shortfall.

2. Increase in subsidy expenditure: Total subsidy expenditure for 2024-25 is projected at Rs 7,767 crore, which is 107% higher than the previous year's revised estimates. This increase is largely due to the newly announced Samrudha Krushak Yojana, which has an allocation of Rs 5,000 crore. Higher subsidies add pressure on the revenue.

3. Agricultural sector challenges: The state's economy is susceptible to unpredictable weather patterns such as erratic rainfall and frequent cyclones, which can affect agricultural output. This leads to instability in revenue flows related to the agriculture sector.

4. Inflationary pressures: Rising energy and fuel prices contribute to inflation, which can reduce consumer purchasing power and increase input costs for businesses and agriculture, indirectly impacting state revenues.

These factors combined present key challenges to Odisha’s revenue position in 2024-25, despite the state's overall positive fiscal outlook with a revenue surplus estimated at 3% of GSDP [1][2].

Citations:
[1] Odisha Budget Analysis 2024-25 https://prsindia.org/files/budget/budget_state/odisha/2024/Odisha_Budget_Analysis-2024-25.pdf
[2] Fiscal Strategy Report - Finance Department https://finance.odisha.gov.in/sites/default/files/2025-02/Fiscal%20Strategy%20Paper%202025-26%20Final.pdf
[3] Odisha Budget 2024-2025 Highlights PDF: Budget Review https://www.adda247.com/exams/odisha/odisha-budget-2024-2025/
[4] Odisha's economy to grow by 7.2 pc in FY 2024-25: Survey https://www.taxtmi.com/news?id=34212
[5] Odisha Economic Survey 2024-25 Report projects state's ... https://kalingatv.com/odisha/odisha-economic-survey-2024-25-report-projects-states-growth-rate-at-7-2-heres-all-you-need-to-know/
[6] Odisha Economic Survey 2024-25 - Finance Department https://finance.odisha.gov.in/sites/default/files/2025-02/Highlights%20and%20Executive%20Summary-English%20Version%20(1).pdf
[7] ODISHA BUDGET – AN INSIGHT - Finance Department https://finance.odisha.gov.in/sites/default/files/2025-01/Odisha%20Budget-An%20Insight%202024-25%20(Vol-I).pdf
[8] odisha state budget 2025-26 https://aptiplus.in/wp-content/uploads/2025/02/Odisha-Budget-2025-26.pdf
[9] RECEIPT BUDGET 2025-2026 https://www.indiabudget.gov.in/doc/rec/allrec.pdf
[10] Odisha Budget 2025-26: Check Key Highlights https://pragativadi.com/odisha-budget-2025-26-check-key-highlights/