Govt to allow more borrowing

Bhubaneswar: The state government on Monday decided to amend the Odisha Fiscal Responsibility and Budget Management (FRBM) Act to allow increased borrowing for capital expenditure.
The decision was taken at the state cabinet meeting headed by chief minister Naveen Patnaik. The cabinet also allowed a maximum fiscal deficit of 3.5% against the current allowance of 3% of the gross state domestic product (GSDP).
"The amendments have been made according to the recommendations of the 14th Finance Commission.Increase in capital expenditure will help revive the economy," chief secretary AP Padhi told the media after the cabinet meet. He said Madhya Pradesh has already made the amendment following the recommendations of the 14th Finance Commission. Sources in the state finance department said the total debt burden of the state so far is pegged at Rs 48,242 crore.
"The 14th Finance Commission allowed the states to borrow up to 25% of the total GSDP. Since our total GSDP is 3,32,329 crore up to January this year, its 25% is around 83,000 crore. We are in a comfortable position," said finance secretary R Balakrishnan.
Sources said the state government would make a provision for open market borrowing up to Rs 14,000 crore against the provision of Rs 6,000 crore.