With Reserve Bank of India (RBI) allowing the Odisha Government to withdraw Rs 2,500 crore from the Consolidated Sinking Fund (CSF), the State will not be forced to borrow from market to clear the debts it has earlier taken from market.

Thanks to Odisha’s prudent financial management, the State is maintaining over Rs13,000 crore of sinking fund, which has come as a blessing in the time of Covid-19 pandemic.

While two major States like Maharashtra and Gujarat are maintaining huge sinking funds, Odisha has been able to maintain such a big deposit with RBI. As on date Odisha’s Consolidated Sinking Fund amount is Rs 13,003.54 crore, which is the third largest CSF in the country, officials say.

Now due to Covid-19, the RBI has relaxed norms to allow the State Governments to withdraw a part of the principal in the CSF to meet redemption obligations. Odisha can withdraw Rs 2500 crore from the CSF. The relaxation in withdrawal norms is valid till March 31, 2021.

Under normal circumstances, Odisha has been able to withdraw Rs 800 crore during Fiscal 2020-21; however, due to relaxed norms, the State Government will be able to withdraw an additional amount of Rs 1,700 crore.

For debt servicing, Odisha would have been forced to take another Rs 1,700 crore loan from the market to meet debt obligations, officials point out.

If the Government of India permission will be taken into consideration, Odisha will be able to take loan upto Rs.1.5 Lakh crore as its Gross State Domestic Product (GSDP) is Rs 6 lakh crore.

While in 2019-20, Odisha’s revenue resources was Rs 1.02 lakh crore and this year revenue generation will badly hit due to the Covid-19 pandemic.

During last three months Union Government has released State Share from the Central kitty worth over Rs 3,000 crore and it is expected that the GST compensation will soon be released.