Orissa - Economy
Orissa remains one of India’s poorest states. The estimates from the Planning Commission reflected in indices such as the percentage of population below the poverty line both in rural and urban areas, and the overall incidence of poverty in Orissa vis-a-vis rest of India reveal that Orissa remains one of the poorest among all the major states of India. The high poverty in Orissa is closely tied to low productivity in agriculture, which is in turn linked to the prevalence of small and marginal holdings.
Odisha is one of the most mineral-rich states in India. Key minerals found in the state are iron, coal, bauxite, manganese, nickel, chromite, limestone, dolomite, graphite, decorative stones, beach sand, China clay, tin ore, etc. At 40.7 per cent in 2018-19, Odisha contributed the largest share of mineral production India in terms of value. Value of minerals produced in the state reached Rs 275.02 billion (US$ 3.94 billion) in 2018-19.
Odisha accounts for over 55 per cent of India’s bauxite reserves, making it an ideal location for setting up aluminium and aluminium-based companies. The state ranks first in the country in terms of both production capacity and actual output of aluminium.
For economic development of any state, industrialization plays a vital role. But for creating a viable atmosphere for industries and corporate houses a sound and smooth infrastructure becomes top priority for the government. Keeping that sentiment in view the government of Odisha since few years has consistently tried to provide a fine tuned industry and investment friendly infrastructure. In that direction the government is becoming successful which is seen through a lot of major changes and improvements occurred in the fields of infrastructure. The most important agenda of government of Odisha has become providing the state best connectivity through roads, rail, sea, and air.
Odisha is one of the important states of India which is endowed with varieties of mineral resources. The mineral resources of Odisha have reputation for being qualitative for industries. The mineral resources of Odisha include Iron ore, Manganese, Coal, Bauxite, Dolomite, Tin, etc. Odisha is one of the favored investment destinations for domestic and international iron and steel players as well as one of the largest producers of iron and steel in India. The total production of iron ore in Odisha was stood to at 103.14 million tonnes during 2018-19 (as of February 2019).
Mineral resources have played an important role to make Odisha hot destinations for industries. Because of mineral resources big industries, like Rourkela Steel Plant, National Aluminum Company, National Thermal Power Corporation, have established their positions not only in India but also in world market. Besides those, reforms in infrastructure in recent years have created an atmosphere conducive for major industries of the world to look forward to Odisha as an epi-centre for industrial growth. In Eastern India, Odisha is really growing in real sense to become an industrial hub in the coming years.
Government of Odisha aims at creating and industry-enabling and investor friendly climate in the state with a view to accelerate industrial developments, employment opportunities and economic growth. IPR-2001 and Odisha Industries (facilitation) Act 2004 embodies the above objectives of Govt. Odisha has already emerged as a major investment destination for national as well as transborder national investors, especially in steel, aluminum, petrochemicals, power, IT and ITES, food processing industries, tourism and other such sectors.
The state’s GSDP grew at a Compound Annual Growth Rate (CAGR) of 8.4 per cent between 2017-18 and 2018-19. The tertiary sector was the major contributor to the state’s GSDP with contribution of 41.76 per cent during 2018-19. As of November 2019, Odisha accounted for a total installed power generation capacity of 8,870.81 MW, comprising 3,828.22 MW under state utilities, 3,423.91 MW under the private sector & 1,618.68 MW under central utilities.
Odisha is among the top ten states accounting for the highest number of MSME enterprises. The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Policy Resolution, 2015. Additionally, the state has sector-specific policies for IT and micro, small and medium enterprises. The state government has constituted "Team Odisha" to help with investment promotion.
Odisha has vast potential for development of tourism. It is one of the critical sectors of the state’s economy, in terms of foreign exchange earnings as well as employment generation opportunities. In 2017, 14,011,229 domestic tourists & 100,014 foreign tourists visited the state of Odisha.
According to the DPIIT, cumulative FDI inflows in the state during April 2000 to September 2019 stood at US$ 592 million. Investment intentions filed in the state is Rs 26,687 crore (US$ 3.82 billion) till October 2019. Agriculture dominates the state's economy. Near about 64% of the people depends on agriculture for their livelihood. Rice is the principal crop and rice is the staple food of the Oriyas but its cultivation has to be made more productive as the output per hectare is below the national average. About 63% of the total cultivable area is under rice production and rice constitutes 79% of the total food crops. Another important food crops are pulses and oil seeds like mustard, seasamum, rapeseeds, linseed, groundnuts etc. Sugarcane is the major cash crop though some amount of jute is produced in some districts like Cuttack, Baleswar etc. Efforts are also on to step up the output of tea, coffee, rubber, cashew nuts and spices. Coconuts are also being produced in this state. Fishing is an important activity of this state. Large quantity of sea fish and inland water fish are produced by this state.
The Industrial Promotion and Investment Corporation Limited (IPICOL), Industrial Development Corporation Limited (IDCOL) and Orissa State Electronics Development Corporation (OSEDC) are the three nodal agencies for promotion of large and medium scale industries in the state.
Orissa has rich mineral base. Important minerals are iron ore, coal, manganese, chromite, dolomite, fireclay and china clay, graphite, kyanite, bauxite, copper, lead, asbestos and mica. Most of these minerals occur in Mayurbhanj, Keonjhar, Sudergarh and Sambalpur districts. Iron ore found in this region is very good quality, chromite is abundant, coal and manganese are of low grades. There is a public sector steel plant in Rourkella and a number of public and private sector factories producing aluminum, cement, ferro manganese etc.
Irrigation has made considerable progress in the state. Hirakud was the symbol of India's achievements. The cultivated land which can be supplied water from canals, lift irrigation and pump sets.
Important railway stations are Puri, Khurdah road, Bhadrak, Bhubaneswar, Cuttack, Rourkella etc. Bhubaneswar airport is connected with Delhi, Varanasi, Calcutta, Nagpur, Hyderabad, Mumbai and Chennai by regular scheduled service. Paradeep was declared as a major port in 1966 while the Gopalpur port has been declared as a minor port in 1987. The improvement of Gopalpur to an all weather port is in progress. The State government has decided to build a Mega Port at Dhamara by private investment. Bahabalpur has been declared as a minor port in 1991.
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