Odisha faces a significant challenge in capital expenditure utilization, with only ₹11,300 crore (15.7%) of its record ₹72,100 crore FY27 capital outlay spent by July end. According to reports from Business Standard, this represents a substantial gap from the state's ambitious budget allocation, which is approximately 20% higher than the revised estimate of ₹60,153 crore for FY26. The state's capital outlay represents 6.5% of its GSDP, making it the highest among all major Indian states, yet Odisha continues to lag in utilization and was among the bottom states in Q1FY27. With only ₹11,300 crore spent in the first four months, the state would need to spend roughly ₹60,800 crore over the remaining eight months to meet its capex target. Officials indicate that if Odisha continues with the same pace of expenditure, it may end up utilising only 60-70% of the capex by the FY end.
The state's capital expenditure is strategically allocated across critical infrastructure sectors, with ₹21,468 crore earmarked for roads and bridges (including ₹17,293 crore as capital outlay), ₹17,855 crore for irrigation and flood control, and ₹12,309 crore for water supply and sanitation. As reported by Business Standard, these sectors account for a major portion of the state's infrastructure spending and have direct implications for connectivity, agricultural productivity, urbanization and industrial investment. The total expenditure excluding debt servicing and disaster management stood at ₹58,996 crore by July end, with programme expenditure at ₹35,438 crore and spending on establishment, operation and maintenance at ₹23,558 crore. Together, these sectors account for a major portion of the state's infrastructure spending and have direct implications for connectivity, agricultural productivity, urbanization and industrial investment.
Odisha has significant opportunities to access central funding through the Special Assistance as Loan to States for Capital Expenditure (SASCI) 2026-27, with an incentive of ₹552.5 crore available if the state achieves more than 10% growth in capital expenditure during April-September 2026 over the corresponding period of 2025-26. According to Business Standard, the state needs to achieve capital expenditure of around ₹21,500 crore by the end of September to avail this incentive. Under Part-III of the SASCI 2026-27, Odisha can access this incentive if it achieves more than 10% growth in capital expenditure during April-September 2026 over the corresponding period of 2025-26. The Centre's SASCI programme is important for states like Odisha as it provides interest-free long-term financial support for capital expenditure, with around ₹2 trillion earmarked under SASCI in the Union Budget this financial year.
Chief Secretary Anu Garg has directed all departments to expedite expenditure and ensure full utilization of budgetary provisions during a recent all-secretaries meeting, as reported by Business Standard. During the meeting, Garg stressed infrastructure-led growth and asked department heads to implement measures promptly through continuous monitoring and ensure timely utilisation of funds. Departments have been instructed to expedite capex for availing a major share under SASCI and submit utilisation certificates on time to secure maximum central grants. The state has already secured 233 projects involving ₹2,961 crore under Part-I of SASCI FY27 for Works, Water Resources, Rural Development and Energy departments, with ₹1,954 crore released. Departments have been advised to furnish utilisation certificates showing 75% utilisation of the funds released in the first instalment so that they become eligible for the second instalment.
Odisha has presented a Budget of ₹3.1 trillion for FY27, with programme expenditure at ₹35,438 crore and spending on establishment, operation and maintenance at ₹23,558 crore by July end. According to Business Standard, officials indicate that if Odisha continues with the same pace of expenditure, it may end up utilising only 60-70% of the capex by the FY end. The state's focus on infrastructure-led growth through continuous monitoring and timely fund utilization becomes crucial for achieving its ambitious capital expenditure targets and securing maximum central grants under various funding schemes. The Centre's SASCI programme is important for states like Odisha as it provides interest-free long-term financial support for capital expenditure, with around ₹2 trillion earmarked under SASCI in the Union Budget this financial year.
