Odisha’s public debt likely to increase to 15.7% of GSDP from current 13.6% over next five years

Why in news

The Odisha Economic Survey 2025-26 projects a rise in the state's public debt to 15.7% of GSDP over the next five years due to increased capital expenditures.

Background

The Odisha government projects an annual growth rate of 7.9% for 2025-26, exceeding national averages. Per capita income (PCI) in the state increased by 9.2% from the previous year, supported by strong growth in the service sector.

Facts for Prelims

• FactCurrent public debt of Odisha: 13.6% of GSDP
• FactProjected public debt of Odisha: 15.7% of GSDP over next five years
• FactProjected annual growth rate for Odisha in 2025-26: 7.9%
• FactIncrease in Per Capita Income (PCI) in Odisha: 9.2% from previous year

For Mains

Q. Analyze the trade-off between increasing public debt for capital expenditure and maintaining fiscal sustainability in Indian states.

Dimensions to cover in your answer

• Fiscal sustainability: Balancing debt-to-GSDP ratios with infrastructure-led growth targets
• Capital expenditure impact: Multiplier effect of public spending on state-level GSDP and PCI
• Borrowing dynamics: Impact of low borrowing costs on state fiscal space and debt servicing

Keywords: Fiscal Federalism · Capital Expenditure · Debt-to-GSDP Ratio · Fiscal Sustainability · Economic Survey

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