1. Introduction & Purpose

The Annual Budget of the Government of Odisha is a comprehensive financial statement that outlines the estimated receipts and expenditures of the state for a given financial year (April 1 to March 31). Its primary purpose is to allocate resources efficiently, implement government policies, promote economic development, and ensure fiscal discipline. The entire process is governed by the Constitution of India, the Odisha Financial Rules (OFR), and the General Financial Rules (GFR), 2017 of the Government of India.

2. The Odisha Budget Cycle: A Step-by-Step Procedure

The budget formulation and approval process in Odisha follows a systematic, time-bound schedule.

1. Stage 1: Issuance of Budget Circular (August-September)
   The Department of Finance issues a detailed circular to all Administrative Departments (e.g., Health, Education, Panchayati Raj). This circular provides instructions, timelines, and formats for submitting their budget estimates for the upcoming financial year. It includes ceilings on expenditure and guidelines for new schemes.
2. Stage 2: Preparation & Consolidation of Estimates (October-January)
   Each department prepares its detailed budget estimates, including both revenue and capital expenditure, and submits them to the Finance Department. The Finance Department, in consultation with the Planning & Convergence Department, scrutinizes these proposals. This involves a detailed review of past performance, justification for new schemes, and overall alignment with state priorities. The Finance Department then consolidates all estimates into a single, comprehensive budget.
3. Stage 3: Cabinet Approval (February)
   The consolidated budget, prepared by the Finance Department, is placed before the State Council of Ministers (the Cabinet) for its approval. The Cabinet can suggest modifications before giving its final nod.
4. Stage 4: Presentation in the Legislative Assembly (Last day of February)
   On the day designated for the budget presentation, the Finance Minister of Odisha presents the budget in the State Legislative Assembly. This is done through a formal "Budget Speech," which outlines the government's financial policies, achievements, and proposed allocations for various sectors.
5. Stage 5: General Discussion & Detailed Scrutiny (March)
   After the presentation, the Assembly holds a general discussion on the budget as a whole. Subsequently, the budget is referred to various Department-Related Standing Committees (DRSCs) for detailed examination. Each department's budget is presented as a "Demand for Grant." The Assembly discusses each Demand, and members can propose cuts (known as 'cut motions').
6. Stage 6: Voting on Demands for Grants & Appropriation Bill
   The Assembly votes on each Demand for Grant. Once all Demands are voted upon, the government introduces an Appropriation Bill. This bill seeks the legislature's approval to withdraw money from the Consolidated Fund of the State to meet the voted expenditures.
7. Stage 7: Passage of Finance Bill & Governor's Assent
   A Finance Bill is also introduced, which contains proposals for taxation, amendments to existing tax laws, and other financial regulations. After both the Appropriation Bill and the Finance Bill are passed by the Assembly, they are sent to the Governor of Odisha for assent, after which they become law.

3. General Expenditure Guidelines (Post-Budget Approval)

Once the budget is passed, the incurring of expenditure is governed by strict rules to ensure transparency and accountability.

Fundamental Principle

No money can be withdrawn from the Consolidated Fund of the State except under the authority granted by the Appropriation Act passed by the Legislature.

Classification of Expenditure

• Revenue Expenditure: Day-to-day operational expenses that do not create assets (e.g., salaries, pensions, maintenance costs).
• Capital Expenditure: Spending that creates assets or reduces liabilities (e.g., construction of roads, buildings, purchase of machinery).

Financial Powers & Delegation

The Odisha Financial Rules delegate specific financial powers to various authorities. For example, a Head of Department may have the power to sanction expenditures up to a certain limit, while larger amounts require approval from the Finance Department or even the Cabinet.

e-Payment & Treasury Management

The Government of Odisha has implemented the e-GRAS (Electronic Government Receipts Accounting System) for online collection of revenues and payments. All expenditures are processed through the Integrated Financial Management System (IFMS) and treasuries, ensuring a digital trail and reducing delays.

Audit & Accountability

All expenditures are subject to audit by the Comptroller and Auditor General (CAG) of India. The CAG's audit reports are examined by the Public Accounts Committee (PAC) of the State Legislature, which holds the executive accountable for any financial irregularities.