Odisha Spends Just a Quarter of Capital Budget by September 2026

Odisha's financial progress in the first half of the 2026-27 fiscal year reveals a significant disparity between budget allocations and actual spending. As of September, the state has spent merely 25.2 per cent of its capital outlay and 33.4 per cent of the overall budget, underscoring challenges in translating ambitious fiscal plans into executed projects.

The state's total budget for the fiscal year 2026-27 stands at Rs 3.1 trillion. However, expenditure figures tell a more cautious story. Out of an estimated Rs 1.8 trillion earmarked for programme expenditure, only Rs 58,508 crore has been disbursed. Capital expenditure, a critical indicator of infrastructure and development activities, lagged even further behind. The state managed to spend Rs 18,183 crore out of the planned Rs 72,100 crore, remaining just about a quarter of the annual capital allocation.

These numbers were shared during a recent meeting of all secretaries, where the Finance department presented the state’s spending data. Excluding debt servicing and disaster management costs, Odisha's total expenditure so far is Rs 94,463 crore. Notably, establishment, operations, and maintenance expenses have decreased by 4.1 per cent compared to the same period last year, indicating a contraction in these operational costs.

This pattern of underspending is consistent over recent years. The Comptroller and Auditor General (CAG) of India highlighted that Rs 2,36,868.57 crore remained unspent or was surrendered across five financial years, from 2020-21 to 2024-25. During this timeframe, Odisha’s total budget expanded by 71.64 per cent, growing from Rs 1,67,663 crore in 2020-21 to Rs 2,87,770 crore in 2024-25. Despite this growth, the state consistently underspent its capital outlay by an average of 17 per cent and its overall budget by 20 per cent.

Such persistent savings against budgetary provisions raise concerns about the accuracy and feasibility of budget estimates. Large unspent balances suggest that projections may not fully account for on-the-ground challenges in project execution. Economists point to administrative hurdles and capacity issues as key factors restraining timely expenditure.

Amarendra Das, associate professor at the National Institute of Science Education and Research (NISER), noted that vacancies within government departments and delays in central fund transfers contribute significantly to the slow pace of spending. He emphasized the need for Odisha to focus on strengthening its administrative capacity if it aims to reach its economic goal of a $1.5 trillion economy by 2047. According to Das, filling senior bureaucratic vacancies and ensuring dedicated leadership for departments are critical steps toward enhancing fund utilization and project completion.

In response to these challenges, Chief Secretary Anu Garg has directed all departments to intensify monitoring and accelerate expenditure, especially in programme and capital outlay areas. With the next six months considered the prime period for government operations, engineering and infrastructure departments have been urged to speed up project implementation with a target of achieving at least a 10 per cent increase in spending during this phase.

Secretaries have been tasked with identifying and resolving obstacles related to project appraisals, detailed project report (DPR) preparations, tendering, and Cabinet approvals. They are expected to closely track progress and hold relevant officials accountable for delays that could hinder timely fund utilization.

Odisha’s ongoing budgetary underspending challenges are not unique. Across India, states often face difficulties converting budget plans into actual expenditure due to bureaucratic processes, land acquisition issues, and delayed contractor payments. Efficient public spending is vital for infrastructure development, job creation, and economic growth, making it crucial for Odisha to address these bottlenecks.

Ultimately, the state’s ability to fully deploy its capital outlay and programme expenditure will influence its developmental trajectory. With a sizeable budget in place, the coming months will test Odisha’s capacity to execute projects swiftly and effectively, ensuring that financial resources translate into tangible benefits for its citizens.