Dikhyaa Mohanty 
According to the status report on public debt provided by the Odisha Finance department, the state of Odisha’s debt level is now within the permitted range and is predicted to rise by 4% by the end of the fiscal year 2026–2027. According to the study, the state’s total outstanding public debt as of the revised estimate for the fiscal year 2022–2023 was Rs 97,037 crore, or 12.7% of the GSDP (Gross State Domestic Product).
The overall public debt is anticipated to rise over the following three years to around 16.7% of GSDP in 2026–2027, which is still within the permitted ceiling of 25%. The debt to gross domestic product (GSDP) ratio must not exceed 25%, according to the 15th Finance Commission and the Odisha FRBM Act, 2005. Odisha’s current amount of debt is within the allotted debt ceiling. Additionally, the debt stock is far lower than that of the Central government, which, according to the Union Budget, represents 57% of GDP. Fiscal imbalance brought on by greater capital expenditures in various state government programs would be the driving force behind this.
The entire amount of debt held by the government is anticipated to rise to Rs 1,12,882 crore at the end of the fiscal year 2023–24, then to Rs 1.40 lakh crore in 2024–25, Rs 1.72 lakh crore in 2025–26, and finally to Rs 2.09 lakh crore by the end of the fiscal year 2026–27. Due to finances from alternative low cost sources like the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) and the Odisha Mineral Bearing Areas Development Corporation (OMBADC), the state of Odisha did not turn to open market borrowing during the years 2022–2023.
Interest rates for the loan from these designated funds are 2 to 2.5 percent lower than those for open market borrowing (OMB). The state government is permitted to borrow up to 60% of the available surplus cash. The amount borrowed on the open market was Rs 24,058.07 billion. According to a revised projection for 2022–2023, about 24.8% of the state’s total debt is made up of borrowing on the open market. From 30% in FY 2021–22 to 24.8% in FY 2022–23, the percentage of borrowing from the open market has decreased, and it is anticipated that this trend will continue in the upcoming fiscal year.
Similarly, the total loan guarantees (guarantee to State PSUs, Urban Local Bodies, Co-operative institutions) as on December 31, 2022 stood at Rs 5,134.91 crore which is 0.7 per cent of GSDP. The guarantees do not constitute a part of the state government’s loan, but in case of default by the state PSUs, the state government is liable to repay the loan. The guaranteed loan as a percentage of revenue receipts has been reduced from 123.37 per cent in 2001-2002 to 6.3 per cent during 2022-23 against the ceiling of 80 per cent. At present the future debt outlook of the state looks stable. If the debt will grow in the medium term, it will be within the sustainability limit. However, it also depends on the policy priorities of the state government, said an official.
