Odisha’s inability to fully utilise the 2024-25 central funds has led to a 18.19% reduction in federal grants a year after the Bharatiya Janata Party (BJP) swept to power in Odisha on the back of its electoral promise to accelerate development through “double engine” governments in the state at the Centre. Officials aware of the matter said the central grants to Odisha rose by 15.48% under the previous Biju Janata Dal (BJD) government in 2023-24 compared to 2022-23, thanks to effective lobbying and better expenditure planning.
Prime Minister Narendra Modi and Union home minister Amit Shah led the BJP’s 2024 poll campaign in Odisha, focused on the potential benefits of the “double engine” government, helping the party win 85 of the 147 seats in the state assembly and 20 of the 21 Lok Sabha seats.
Officials cited above said funds for centrally sponsored schemes are released in instalments, with subsequent tranches contingent on spending previous allocations. “Odisha’s inability to fully utilise these funds led to reduced disbursements. If the state cannot demonstrate effective spending, the Union government holds back further release of funds,” said an official, who did not want to be named.
Officials said effective lobbying with the Union government could have secured higher allocations. “In 2023-24, the central grants to Odisha rose by 15.48% compared to 2022-23. It shows effective lobbying and better expenditure planning,” said the official.
Funding under centrally sponsored schemes has, since 2015-16, accounted for over 20% of total federal grants for sectors such as education, health, employment, and the welfare of Scheduled Castes and Scheduled Tribes.
States with lower implementation capacity, such as Odisha, face challenges in executing these schemes effectively. Officials said the requirement to prepare district and state agricultural plans for schemes like Rashtriya Krishi Vikas Yojana, an incentive-based programme where allocations are not automatic but tied to planning, has compounded the problem.
The central grants to Odisha declined from ₹21,500 crore in 2023-24 to ₹17,000 crore under housing, irrigation, and water supply schemes, Pradhan Mantri Awas Yojana, Pradhan Mantri Krishi Sichayi Yojana, and Jal Jeevan Mission. The funding under Pradhan Mantri Awas Yojana (PMAY)-Rural went down from ₹4,310 crore in 2023-24 to ₹825 crore in 2024-25.
The allocation under PMAY-Urban funding declined from ₹296 crore in 2023-24 to ₹0.73 crore in 2024-25. The funding under the rural connectivity scheme, Pradhan Mantri Gram Sadak Yojana, dropped from ₹1,262 crore in 2023-24 to ₹712 crore in 2024-25, from ₹146 crore to ₹32 crore under Pradhan Mantri Krishi Sichayi Yojana, and from ₹1,581 crore to ₹368 crore under the Jal Jeevan Mission.
Odisha did not get anything in 2024-25 under the agricultural development scheme, Rashtriya Krishi Vikash Yojana, which provides 60% central funding. In 2023-24, it received ₹223 crore under the scheme.
A review of the spending in February this year found that at least 16 of 44 departments failed to spend even half their allocated funds by January end.
Departments such as disaster management (13.5%), sports and youth services (19.77%), steel and mines (20.5%), mission shakti (23%), Odia language, literature and culture (27%), tourism (38%), energy (46%), transport (47%) failed to spend 50% of their budgets by January-end.
Odisha finance secretary Saswat Mishra, whose department deals with the central allocations, did not reply to a questionnaire.
Opposition BJD leader Debi Prasad Mishra said the reduction in funding showed the chief minister Mohan Majhi-led government’s inability to govern. “In the last year, the government has done nothing except rename schemes introduced during the previous Naveen Patnaik government and change the colours of buildings,” said Mishra. He asked if the BJD could get more funds under the centrally-sponsored schemes, and why the Majhi government was unable to do so. “This shows the double-engine government was just an election hype.”
BJP lawmaker Akash Dasnayak called the dip in the funding an aberration and said Modi wants to see Odisha developed and is ready to help with more funds. He said funding for a scheme like the PMAY may have come down due to the ongoing survey of beneficiaries. “Once the survey is complete, we will get more funding.”