Worst to best: The fiscal evolution of Odisha in the last two decades [Video]

From being one of the most fiscally stressed States at the turn of the millennium, Odisha has become among the least indebted State by the end of FY24. A recent article in the Reserve Bank of India’s State Finances: A Study of Budgets analyses Odisha’s fiscal journey from 2000 to 2024. This was the time when Naveen Patnaik, who is now the Leader of the Opposition, was Chief Minister of Odisha.

According to the RBI article, the passage of the Odisha Fiscal Responsibility and Budget Management Act (OFRBMA) in 2005 marked a decisive shift in the State’s financial journey. The article divides Odisha’s journey into four phases: 1) FY01-FY05: high debt-era; 2) FY06-FY14: debt consolidation through rule-based fiscal policy; 3) FY15-FY20: prioritising capital expenditure; 4) FY21-24: pandemic to the present.

Chart 1 | shows the debt-to-GDP ratio of all States and the debt-to-GSDP ratio of Odisha in FY01- FY24. It also captures Odisha’s capital outlay as a percentage of …