Q. Why is Government budgeting considered a critical tool for economic development in India? How does the budgeting process in Odisha align with or differ from the national framework?
Ans: Government budgeting is a strategic instrument of economic governance in India. It reflects the priorities, policies, and developmental vision of the government, enabling resource allocation, fiscal discipline, and inclusive growth.
Importance of Government Budgeting in India’s Economic Development
- Resource Allocation
- Directs funds to priority sectors like infrastructure, health, education, and agriculture.
- Promotes balanced regional development and reduces disparities.
- Macroeconomic Stability
- Helps manage fiscal deficits, inflation, and public debt through planned expenditure and revenue mobilization.
- Social Equity and Welfare
- Enables targeted spending on poverty alleviation, subsidies, and social protection schemes.
- Employment Generation
- Public investment in sectors like construction, manufacturing, and rural development creates jobs.
- Transparency and Accountability
- Budget documents and parliamentary debates ensure public scrutiny and fiscal responsibility.
- Policy Implementation
- Translates government policies into actionable programs with financial backing and performance metrics.
Budgeting Process in Odisha: Alignment and Divergence
Odisha follows the broad constitutional and procedural framework of budgeting similar to the Union Government, but with state-specific innovations.
Alignment with National Framework
- Four-Stage Process:
- Formulation, Enactment, Execution, and Review, as practiced nationally.
- Constitutional Provisions:
- Follows Articles 202–207 for state budgeting, akin to Articles 112–117 for the Union Budget.
- Classification of Budget:
- Divided into Revenue and Capital Budgets, with Plan and Non-Plan Expenditure.
- Legislative Oversight:
- Budget presented in the State Assembly, debated, and passed through Appropriation and Finance Bills.
Distinctive Features in Odisha’s Budgeting
- Outcome-Based Budgeting
- Odisha pioneered Outcome Budgeting in 2010–11, linking expenditure to measurable results.
- SDG Budgeting
- Introduced SDG-aligned budgeting in 2021–22, mapping 1,005 schemes to 16 global goals, integrating sustainability into fiscal planning.
- Digital Budgeting Tools
- Adopted BETA (Budget Execution Technique Automation) for real-time tracking and reduced duplication.
- Green Budgeting Initiatives
- Focus on climate-responsive spending, especially in energy, transport, and agriculture sectors.
- Decentralized Planning
- Strong emphasis on district-level planning, aligning with local needs and Mission Shakti SHGs.
Conclusion: Government budgeting is a cornerstone of India’s economic strategy, enabling growth, equity, and governance. Odisha’s budgeting process, while constitutionally aligned with the national framework, stands out for its innovative practices, SDG integration, and technology-driven reforms, making it a model for responsive and inclusive fiscal management.