Budgeting of Sustainable Development Goals in Odisha

By Balakrushna Padhi and Udaya S Mishra

Sustainable Development Goals (SDGs) are globally agreed upon, indivisible 17 goals and 169 targets these represent a blueprint for the achievement of a better and more sustainable future for all by 2030 with the commitment of ‘leaving no one behind’. These goals and targets have been formulated in keeping with the key challenges that the world is facing, such as poverty, hunger, inequality, climate change, unemployment, etc.

Sustainable Development Goals

For more details about these 17 goals, click here.

India, being one of the prime signatories of the SDGs, has implemented these as the guiding principle for the country’s future development strategy. The country has made significant progress towards the realization of these, including the development of an SDG localization model centred around adoption, implementation and monitoring of these goals at various levels (State and district levels). India has also developed a National Indicators Framework for monitoring and tracking specific SDG indicators (as reflected on the NITI Aayog portal). The accomplishment of these SDGs requires the provincial government’s commitment towards adequate and judicious allocation of funds in priority sectors, improvement in the quality of spending and other resources.

The state of Odisha is a frontrunner among major Indian states in introducing far-reaching reforms in budgeting and governance over the past decades. The State’s budget for 2021 captures people’s aspiration for a ‘New Odisha’ by transforming ‘reactive governance’ to ‘proactive governance’. Odisha has undertaken and initiated numerous positive initiatives for the realization of SDGs in the state – integrating these into the state’s overall budget planning process, thereby, making it more comprehensive and dynamic. The Planning and Convergence (P&C) Department of the Government of Odisha is mandated with the task of coordinating the evaluation and monitoring of SDGs by adopting a synergistic approach, involving various other key stakeholders, such as UNICEF. The state government has undertaken an exhaustive mapping of various SDG targets and indicators against the relevant government schemes and programmes (centre and state sector schemes, centrally sponsored schemes) by bringing together economic, social and environmental aspects. With the assistance of UNICEF, the Government of Odisha has also developed the Odisha SDG Indicator Framework for monitoring the progress of various SDGs goals and targets through mapping of outcome, output and process indicators. Further, the state is in the process of establishing a baseline for the indicators. The approach, to date, is meaningful in paving the path towards achieving the said goals.

The latest SDG index (2019-20) prepared by the NITI Aayog, Government of India, situates the state of Odisha among few states in India identified as the fastest movers (performer state) in achieving certain goals. The motivation behind such an assessment is to recognise and reinforce the levels of commitment of the state governments towards accomplishing SDG goals and targets and in obtaining an assessment of the required investment to achieve the 2030 SDG goals. Gauging the requirement of funds towards materialising these goals may be necessary but not sufficient as prioritization and allocation by the state is equally important. In other words, mainstreaming and accelerating efforts of state governments remains vital for the SDG agenda. Prior to 2015, the state of Odisha’s performance in the Millennium Development Goals (MDGs) from 2000 to 2015 was noteworthy, particularly with respect to socio-economic development.

From 2018-19, Odisha has ranked second among Indian states in terms of the overall improvement (an increase of 7 points).  Industrial innovation and infrastructure (goal 9), clean water, and sanitation (goal 6) and affordable and clean energy (goal 7) contributed most to the incremental points. However, as per the state level SDGs index, Odisha’s performance in terms of poverty gap ratio in rural (7.01) and urban (3.15) and percentage of households with any usual member covered by a health scheme or health insurance (47.70) ¹ need additional attention to track and analyse the changes and development.

SDGs index position of Odisha in 2018 and 2019 in different goals (as per different scores)
Source: NITI Aayog (2020). SDG India, Index and Dashboard-2019-20, UN

The state’s performance during 2018-19 as depicted in the table above is impressive given the number of targets in which the state has moved from aspirant status to the performer and front-runner status. Within one year, two goals have moved from being in the aspirant category to that of front-runner and another two have moved from the aspirant to performer category.  This apparent shift towards better status in almost all goals excepting 4 out of 16 reflects the success in compliance to SDGs in the state.

In collaboration with the Finance and P&C Department and in partnership with UNICEF, the state has evolved the preparation of a comprehensive mapping matrix between goals and their associated schemes and programs implemented by the various departments and agencies. This approach is undoubtedly helpful in improving the Odisha State Indicator Framework for SDGs and in identifying prospects for further convergence and co-implementation of schemes and programmes, thereby, enabling the process of charting responsibilities of initiatives across departments and in monitoring progress clearly. The state has brought out its first SDG based budgeting policy document in FY 2021-22 in partnership with UNICEF Odisha.

The Odisha SDGs Budget document offers an overview of the approach of budget planning and management process for SDGs in terms of identifying alignment of its financial allocation with the goals, their achievement, and the challenges. It is vital to note that the SDGs budget is not a separate budget but is a methodology to assist the government in aligning SDGs perspective into the budget as the key state plan for public expenditure. As reflected in the latest Odisha SDGs report, ‘SDGs index aligned with the budgetary mandate can further serve as a critical reminder for the policy and action towards achieving the wellbeing of the people and towards the 2030 Agenda (SDG Budget, Odisha, 2021-22).’ In this way, given the nature of SDGs, the horizontal integration across sectors and institutions could help with the rationalization of existing schemes with similar objectives with optimal allocation of resources. Further, there is a need for vertical integration of monitoring and evaluation structure in alignment of SDGs in different plans and strategies of the state government.

The mapping of SDGs budget reflects that the total budget outlay for the first SDG budget of Odisha for the year 2021-22 is around INR 1,34,225 crores, spread across 16 goals, with the involvement of almost all the departments of the Government of Odisha and 1,005 programmes and schemes. Further, the SDG based budget share comprises almost 22 percent of the state’s GSDP. It is also reflected that in the FY 2021-22 BE, programme expenditure (55%) constituted the major share of the SDG budget outlay whereas administrative expenditure and other expenditure constitute 36 percent and 9 percent respectively. From among the 16 goals taken in the SDG budget, Goal 4 (quality education) has the highest share of budget allocation at 16.8 percent of the total SDG outlay, with an amount of INR 22,637.3 crores contributing towards the achievement of the goal, linked to a total of 20 major departments.

Department SDG Budget Share 21-22 BE

Source: Odisha SDG Budget, 2021-22

While examining the budget share of various goals, Goal-10 (Reduced inequalities) has the second-highest share of budgetary allocation at 15.44 percent of the total SDG outlay, with an allocation of INR 20721.8 crores towards the achievement of the goal. The contribution towards the total SDG budget from the State Sector Schemes is about 34.07 percent amounting to INR 45,735.7 crores and from the Central Sector Schemes is 20.19 percent with a share of INR 27,104.7 crores. The major share of expenditure on Goal-4 and Goal-10 is from establishment, operation and maintenance (administrative expenditure).

Goal-wise expenditure share 2021-22 BE

Source: Odisha SDG Budget, 2021-22

The source of financing expenditure for various goals indicates the predominance of state-sponsored schemes in many of the goals. This in itself can be taken as the commitment of the state towards target compliance as regard SDGs. This exercise is a novel attempt showcasing an approach that evaluates allocation patterns and prioritization schemes leading to success in realising the set targets corresponding to various goals. Also, these help in setting up mid-year targets for the accomplishment of SDGs goals and targets. An exposition of this kind may be emulated by other states to recognise the shortcomings of their budgetary schemes. Reconciling budget heads with target indicators on one hand and disentangling the expenditure allocation across various departments for the same target on the other, informs the need for prioritization in achieving the 2030 Agenda of Sustainable Development. As reflected in the Odisha SDGs document 2011-12, ‘Mapping budgetary priorities in relation to the SDGs does not automatically lead to more coherent management or reorientation of resources as accounting and budgeting frameworks need to be aligned to integrate SDGs.’

AUTHORS
Udaya S Mishra, Professor in Economics, Centre for Development Studies, Trivandrum, Kerala

Balakrushna Padhi, Economist, Centre of Excellence in Fiscal Policy and Taxation (CEFT), Xavier University, Bhubaneswar

Views expressed are personal.