By Bizodisha Bureau, Bhubaneswar, March 14, 2016 : In a bid to raise higher borrowing to meet the rising capital expenditure [Capex], the Odisha Cabinet on Monday endorsed a move by the state government to amend the Odisha Fiscal Responsibility and Budget Management (FRBM), 2005 raising the level of fiscal deficit to 3.5% of the Gross State Domestic Product (GSDP) from 3% now.

“According to the recommendations of the 14th Finance Commission, states with debt-GSDP ratio below 25% and interest to revenue receipts ratio not exceeding 10% can relax the fiscal deficit level by an additional 0.5%. Odisha meets both the criteria and hence, we can stretch the fiscal deficit limit”, Odisha chief secretary, Aditya Padhi said soon after the Cabinet meeting.

Incidentally, the state’s capex has grown substantially over the years and by the end of the current fiscal, it is pegged at 4.3% of the GSDP.

The hike in fiscal deficit means will allow the state government not only to go for higher borrowing to meet its growing capex targets but also take over the loans of financially stressed PSUs like Gridco.

Padhi said that if the state government chooses to take over 75% of Grdico’s loans, it can raise the debt-GSDP ratio by 0.3%.

Besides, the Cabinet also gave its nod to constitute State Food Commission under the Food Supplies and Consumer Welfare Department, which will be chaired by the chief secretary and consist of five members not below the rank of a principal secretary, including a member convenor from the department of food supplies and consumer welfare. The tenure of the Commission’s Chairman is fixed at 3 years.

In toto, the Cabinet chaired by chief minister Naveen Patnaik approves seven proposals.

Among others, the cabinet approved setting up of a sanitation mission which has been mandated to construct safety latrines in nine cities in the state. Sulabh International is to construct 5957 toilets at a cost of Rs 70 cr in nine cities of Odisha falling under Centre’s AMRUT Scheme.