CAG urges states to build Odisha-like budget buffers

'STABLISATION FUND WILL COME IN HANDY IN HARD TIMES'

- PRASANTA SAHU

AMID CRITICISM ABOUT some state governments’ budgeting practices and their allegedly inadequate planning for revenue shocks, the Comptroller and Auditor General of India (CAG) has urged all states to adopt the Odisha model by establishing a budget stabilisation fund to create fiscal buffers for challenging periods.

Odisha, the only state to establish such a fund right after the Covid-19 pandemic, has already built a corpus of around %21,000 crore (2.2% of GSDP) by diverting a share of surging mining revenues since FY23.

This is showcased as “best practices” to state finance secretaries at a recent CAG-organised conference in Delhi.

“The Odisha budget stabilisation fund was recognised at the conference as an excellent practice that states with surplus funds can emulate,” said Deputy CAG Jayant Sinha.