The Hindu : Orissa plans massive fiscal reforms

Online edition of India's National Newspaper
Tuesday, May 28, 2002

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Orissa plans massive fiscal reforms

By Our Staff Reporter

PURI MAY 27. The Orissa Government has decided to go in for massive fiscal reforms and privatisation of public enterprises to check economic deterioration and ensure more capital investments in the social and infrastructure sectors, according to top bureaucrats.

Orissa's debt burden at the end of 2000-2001 was Rs. 21,035 crore and, if no action was taken, this was likely to go up to Rs. 34,063 crore by 2005-2006. The State's own revenue, together with its share of Central taxes and grants from the Centre, now fell short of the expenditure on salary, pension, interest payment and repayment on principal by more than Rs. 150 crore.

Senior bureaucrats of the State, at a two-day media colloquium on economic reforms that ended here on Saturday, admitted that the Government had failed to manage its finances and run public enterprises in an efficient manner.

The officials, including the Chief Secretary, D.P. Bagchi, observed that privatisation of public enterprises was necessary as the State was no longer in a position to pay for their increasing demands. The enterprises had accumulated heavy losses and required infusion of large amounts of equity capital and loans to survive.

The need for resources for social development, which had been relatively neglected, was much more, Mr. Bagchi said. People must realise that privatisation was a necessity. The Government wanted to concentrate on poverty reduction and ensure better quality of life through socio-economic development.

The Finance Secretary, Ajit Kumar Tripathy, submitted that reduction in the size of the civil service, cutting down on borrowings and making public enterprises less dependant on the Government were necessary to check the drain on the State's finances.

The Public Enterprise Secretary, Jugal Kishore Mohapatra, said reform had become essential to ensure higher growth, promote efficiency, provide competition, improve the quality of life and provide good governance. Of the 68 State public enterprises, 34 were in operation and only nine were making profits.

The Union Disinvestment Secretary, Pradip Baijal, said that the country had to privatise all the enterprises in the non-strategic sector to check a further deterioration of the economy. Now was an ideal time to privatise. Privatisation was no longer a dirty word in most parts of the world, Mr. Baijal said.

The media must not take the side of the vested interests. It must support the tax-payers.

The event was jointly organised by the State Government and the Confederation of Indian Industry.

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