Between Prudence and Performance: Measuring Odisha’s Fiscal Outcomes in the Era of the 15th Finance Commission

This is an accepted article with a DOI pre-assigned that is not yet published.This study provides a comprehensive econometric outcome evaluation of Odisha's fiscal architecture under the 14th and 15th Finance Commissions (FC). Employing a multi-method framework including time-series analysis, tax effort estimation, and Vector Autoregression (VAR) projections it traces the state's transformation from fiscal distress to exemplary prudence. Analysis of data (2000-01 to 2030-31) reveals consistent revenue surpluses, a steeply declining debt-to-GSDP ratio (14.9% in 2022-23), and high capital expenditure (27.4% of outlay). Odisha effectively leveraged FC-XV's performance-linked grants for disaster resilience, health, and local governance, with correlational evidence of positive sectoral outcomes. Despite this, structural vulnerabilities endure, primarily from volatile mining revenues and underperformance in property tax mobilization, as identified by a Representative Tax System analysis. Projections from a VAR model affirm a sustainable fiscal trajectory, with the debt ratio remaining well below statutory limits. The findings indicate that Odisha's success is underpinned by strict adherence to FRBM principles and a strategic, growth-oriented expenditure composition. The conclusion emphasizes that sustaining this resilience requires continued innovation in revenue diversification, formal outcome-based monitoring systems, and institutional mechanisms like a stabilization fund to mitigate revenue volatility. The study offers critical, evidence-based insights for fiscal federalism and sub-national fiscal management in developing economies.