A PROJECT ON DEVELOPMENT ECONOMICS

(LW-2116)
TOPIC:-ECONOMIC SITUATION IN ODISHA

SUBMITTED TO: - SUBMITTED BY: -

MR.AMAR KUMAR MOHANTY SIBES PATNAIK

STREAM: B.A.LL.B.

ROLL NO:1783110

BATCH:2017-2022

CONTENTS
TOPIC PAGE NO

INTRODUCTION 3-5

STATEMENT OF ISSUE 6-8

ANALYSIS OF THE ISSUE 9-12

FINDINGS AND CONCLUSION 13-15

REERENCES 16

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 INTRODUCTION
A significant change in inequality in income and wealth is possible only in a longer
term perspective. Employment structure of an economy is the normal instrument
that can cause a change in inequality either way, i.e. an increase or a decrease in
the inequality. Other economic instruments such as target group policies and
programs have a short term impact, but the redistribution through employment is
sustainable. Since the governments function within the administrative and fiscal
constraints, the target group programs normally have a marginal impact on income
redistribution. Income of labor enables flow of resources across income classes of
people and across the social and ethnic groups. Flows of income across locations
are influenced both by assets available and by other modes of creating employment
opportunities. However, income generated by employment of migrant labor,
facilitates flow of resources across regions for a given regional distribution of
capital assets. Employment and equity of income across classes of people and
across regions are, therefore, closely related to each other in the long term.

Most top professionals and market gurus in India and abroad are of the opinion that
India has never been hit badly economically in the past not even in the time of
recession. This is a huge boost for the industry in India and there never has been a
slump in employment. This shows that the economic backbone of India is strong
than some of the developed countries of the world. Most global companies prefer
India over other developing nations for setup because these companies know that
India is growing at steady rate and in few years time it would be economically at
par with some of the developed nations.

With the increase of number of companies coming to India and opening up their
branches all over the country, the increase in the number of jobs have also risen
sharply. Especially in metropolitan cities the availability of jobs is increasing day
by day. This is good news for people who are fresh graduates and for professionals
who are looking for not only better jobs but also high paid jobs. But the only sad
part is that still there is significant inequality in wealth and income and it can only
be solved in the long term.

In recent years economic activities in Odisha have surged upwards in various

sectors resulting in high growth rate of GDP as compared to national growth rate.

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This is particularly true in the industry and service sectors. The GDP growth rate of
the State is projected to reach 7.14% in 2017- 18 fiscal against the World Bank’s
projection of national growth rate of 6.7%. The State’s economy has rebounded
strongly with the real growth rate touching double digit figures for the first time
(10.39%) during 2016-17 against the national figure of 7.11%. Crop production
has recorded an encouraging growth rate of above 27% in 2016-17. All these
trends indicate a state of sustainable and inclusive growth in economy achieved
during last two decades because of consistent initiative and more investment in
irrigation, infrastructure, poverty alleviation, health care, education, development
of human resources and industrial promotion.

During the years 2011-12 to 2016-17, the Economy of Odisha has grown steadily
at an annual average rate of 7.02 percent. In 2016-17, Odisha has bounced back to
double digit real growth rate of 10.39 percent; increase in real per capita income to
Rs.63,674/-, recorded low level of price inflation of 1.3 percent, with above 27
percent growth in the crops sector accompanied by decline in unemployment rate.

The State expects to have a real growth rate of 7.14 percent and real per capita
income of Rs.67,522/- in 2017-18. Services sector and industry sector are the
major drivers of the State’s economy having the relative share of 43 & 33 percent
in GSDP respectively during 2016-17. Farmers’ income has doubled in the last
decade. Poverty ratio fell sharply and over 8 million poor people were pulled out
above poverty line between 2004-05 & 2011-12. Infant Mortality Rate stands
reduced from 96 per thousand live births in the year 2000 to 40 in 2015-16.
Establishment of four investment regions for industrial clusters at Kalinganagar,
Paradip, Dhamra and Bhubaneswar, Make in Odisha conclave in 2016, Single
Window Investor Facilitation Portal like GO SWIFT are expected to attract
investment to spur industrialization in Odisha. Odisha’s Disaster Management
along with zero casualty policy has received global recognition and has become the
model for other States. More than 47,000 villages were electrified, Road density
improved to 165 km per 100 sq. kms. The schemes like connecting unconnected
villages, Mukhyamantri Sadak Yojana and Biju Gaon Gadi Yojana etc speak of the
core rural infrastructure development strategy of the State. Interventions like
ANWESHA and AKANKSHYA have created new hopes for poor SC & ST youth
to have quality education with financial support from the State Government.
State’s own schemes like BASUDHA for safe drinking water supply, AWAAS for
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low cost housing and the Scheme MAMATA for maternity and child benefit will
contribute immensely towards improvement in human development status in the
State.

5
 STATEMENT OF ISSUES
Striking Growth Rate : Odisha’s economy has shown a striking performance in
2016-17, the growth rate being 10.4%. Crops. mining, trade, transport and social
sectors drive Odisha to a State on move.

Real Growth Rate of Odisha

20.00 10.39
8.17
10.00

0.00 2015-16 (2nd R) 2016-17 (1st R)

Increased Agriculture Production : Crop sector was buoyant in 2016-17. The

principal crop rice in terms of production (98 lakh MT), cropped area (39.63 lakh
ha.) and yield rate (24.72qtl/ha) led to unprecedented growth rate of 27%.
Impressive State government intervention on certified quality seed provision,
improved agriculture implements, farmers extension etc showed the way to visible
upswing in the crop sector.

Rice production in 000'MT

15000 9794
5875
10000

5000
2015-16 2016-17
0

Progressive Industrial Development : The Sate’s manufacturing sector recovered

notably. State specific IIP increased by 17%. Metalic industry production is the
major driver of growth of this section.

IIP Manufacturing
300 282.520

250 241.899

200
2015-16 2016-17

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Odisha is the leading State to establish 4 Investment Regions in the focus sectors,
viz., National Investment & Manufacturing Zone (NIMZ) at Kalinganagar,
Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) at
Paradeep, port based manufacturing zone at Dharma and Information Technology
Investment Region at Bhubaneswar.

Assured Debt Sustainability: The debt stock of Odisha which was high as 50.73 in
2002-03 has been brought down to 15.72% in 2016-17 against the bench mark
target level of 25%

Improved Health Care: Remarkable strides are observed in access, finance and
delivery system of health sector in Odisha with IMR of 40, USMR of 49,
Institutional delivery of 85%, 5 medical colleges, 892 transport referral services
for 3.5 lakh infants, 44000 ASHA’s for 47147 villages and implementation of new
scheme Mukhyamantri seva mission 2017-2018 etc.

IMR(Infant mortality rate)

IMR(per 1000 live births)- Odisha and

India
80 65
57
60
40 41 2005-06
40

20 2015-16
0
Odisha India

Skill Development and Employment : It is targeted to skill 11 lakh youth during

2014-15 to 2018-19 under Chief Minister’s Employment Generation Programme.
Deen Dayal Upadhyaya Koushalya Yojana (DDU- GKY), bears huge sustainable
employment potential. 52.7 thousands and 43.7 thousands rural youths were
trained and placed with jobs under DDU-GKY scheme in last three years. ORMAS
partners 81 Project Implementing Agencies(PIA) to implement DDU-GKY
components. The Yajona trained 71,179 youths and placed 53,819 skilled youths in
industries inside and outside the State since inception. The Yojana targets to train
35,000 rural poor youths in 2018-19. Odisha received the Best Performing State
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Award from Ministry of Rural Development, Govt. of India for the resounding
success of the DDU-GKY in 2016- 17.

Growing Employment in IT Sector : Bhubaneswar emerged as national leader in

smart city challenge amongst 98 cities. IT/ITES companies expanded to generate
17000 IT employments in 2017 growing by 15% YoY and expects to generate
about 33 thousands IT employments by end of 2018.

Remarkable Poverty Reduction : Eradication of poverty in all its forms remains

one of the greatest challenges facing humanity. Sustainable Development
Goal(SDG)-1 ensures end poverty in all its forms by 2030. The poverty report of
Odisha highlights that poverty ratio has been dropped substantially between 2004-
05 to 2011-12. The poverty analysis is based on household consumption and
defines the poor as those whose expenditure falls below the poverty line, set at Rs.
407.78 for rural and Rs. 497.21 for urban areas in 2004-05; the corresponding
figures were Rs. 695 for rural and Rs. 861 for urban areas in 2011-12.

Figure-1 analyzes poverty ratio and percentage change from 2004-05 to 2011-12 of
selected states and all India. The State witnessed the highest reduction of poverty
ratio of 24.6 points from 57.61 percent in 2004-05 to 32.59 percent in 2011-12
among Indian States like Andhra Pradesh (20.7 points), Assam(3.32 points),
Bihar(20.66 points), Chhatisgarh(9.47 points), M.P (16.9 points) and U.P (11.47
points). The annual rate of reduction stands at 3.5 percentage points per year as
against the all- India rate of 2.2 percentage points.

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 ANALYSIS
The economy of Odisha recorded an annual average growth rate of 4.2 percent
during the period 1951-2011 against the all- India average of 4.9 percent at 2004-
05 base price. This implies a gap of 0.7 percentage points for the State from
national average. From 2003 onwards, the growth rate of the State accelerated and
entered into a higher trajectory of above 8 percent as against the national average
of 7.5 percent thus becoming one of the fast-growing economies of the country.

Sectoral Share (in per cent) at current prices in 2011-12 base

2017-18
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
(Advance)

Agriculture and
17.87 21.44 20.24 22.21 20.04 21.57 19.98
Allied

Crops 11.60 15.05 13.56 15.03 12.34 13.96 12.54

Livestock 2.45 2.56 2.60 2.72 2.81 2.92 3.00

Forestry and
2.60 2.49 2.80 2.93 3.06 2.68 2.36
Logging

Fishing 1.22 1.34 1.28 1.53 1.83 2.01 2.08

Industries 43.59 39.70 40.64 36.69 37.45 35.71 34.77

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Mining and
12.03 10.70 10.23 9.16 9.47 8.26 7.72
Quarrying

Manufacturing 18.69 16.91 18.43 16.00 16.10 16.46 16.23

Electricity, Gas,
3.52 3.76 3.72 3.42 4.07 3.60 3.64
Water Supply

Construction 9.35 8.32 8.25 8.11 7.80 7.39 7.18

Services 38.54 38.86 39.13 41.10 42.52 42.72 45.25

2017-18
Economic Activity 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
(Advance)

Trade, Hotels and

9.24 9.78 9.88 10.26 10.08 10.14 10.37
Restaurants

Transport,
Communication,
etc 6.12 6.26 6.32 6.94 7.39 7.54 8.01

Financial Services 3.62 3.65 3.43 3.61 3.89 3.95 4.12

Real Estate,
Ownership of
Dwelling & 7.75 7.63 7.65 7.87 8.12 7.76 7.81
Professional

Public
Administration and
Defence 3.92 3.94 4.96 5.14 5.19 4.98 6.20

Other Services 7.89 7.60 6.89 7.29 7.85 8.35 8.74

TOTAL GSVA at
100.00 100.00 100.00 100.00 100.00 100.00 100.00
Basic Prices

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Real growth of GSDP (percent) by Sectors from 2013-14 to 2017-18

Sector 2013-14 2014-15 2015-16 2016-17 2017-18

Agriculture, forestry & fishing -4.16 7.84 -13.52 19.65 -4.70

CAGR %(2011-17) -- -- -- -- 2.81

Industries 16.23 -7.02 16.47 6.35 5.23

CAGR% (2011-17) -- -- -- -- 5.72

Services 7.79 7.75 8.11 10.74 12.42

CAGR% (2011-17) -- -- -- -- 9.02

GSVA at basic price 8.90 1.30 7.49 10.14 6.64

GSDP 9.26 1.80 8.17 10.39 7.14

CAGR% (2011-17) -- -- -- -- 6.98

CAGR% (All India), 2011-17 -- -- -- -- 6.82

Trends in Inflation: Odisha and India

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10

4
2014 2015 2016 2017 (Jan-
2
Nov)
0
Odisha India

As prices for goods and services that we consume increase persistently, it is seen as
inflation. The general idea is that households are thought to be worse-off when
inflation rate is too high, and it becomes a concern for the government. The
changes in prices affect the real purchasing power of consumers and their welfare.

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Thus inflation becomes the primary focus of policy makers. Inflation is measured
using consumer price index (CPI). The percentage change in this index over a
period of time gives the extent of inflation over that specific period, i.e. the
increase in prices of a representative basket of goods consumed.

The Census 2011 shows that the State has a total workforce of 175.41 lakh, which
is 41.8 percent of the total population as against 38.4 percent at the all-India level.
The proportion of male and female workers works out 67.9 percent and 32.1
percent respectively. Of the total workers, the main workers constitute 61 percent,
while the rest 39 percent belong to marginal workers. The total workers have
registered a growth of 22.9 percent over 2001, which is higher than population
growth rate of 14 percent during the decade.

Item 2001 2011

Total population 368.04 419.74

Total Workers 142.76 175.41

Main Workers 95.89 107.07

Marginal Workers 46.87 68.34

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 FINDINGS AND CONCLUSION
The growth trajectory of Odisha remained promising in current decade except few
exceptions. Political stability and economic leadership in last two decades made
Odisha the eastern gateway to a vibrant economy. Odisha Economic Survey 2017-
18 evaluates the current scenario of State’s economy. The Report assesses the
efficiency, sufficiency and deficiency conditions while looking ahead with the
emerging challenges, potential and opportunities ingrained in the State’s economy.
Its rich natural resources were sustainably and judiciously managed. Its potential
human resources were adequately skilled and instilled with confidence for
sustainable and quality livelihoods. The programme expenditure of the State
becomes more people centric. Technologies play the supportive role to accelerate
the process of development streams. Structural transformation of the State’s
economy is visible.

Odisha’s macro aggregates showed upswing trend. The downside pressure of

demonetization and global uncertainties did not deter the State to grow with a
humble anticipated real growth rate of 7.14% in 2017-18. Odisha performed better
than India’s real growth rate 6.5%. The State Government enlarged the scope of
State finances and fiscal space with higher allocations/expenditure over previous
financial year. The budget estimates of Government expenditure of Odisha
increased from Rs 94053 crore in 2016-17 to Rs 106911 crore in 2017-18. Poverty
reduced incredibly by average annual reduction rate of 3.5% percentage points as
against a lower reduction rate of 2.18 percentage points at All India level.
Irrigation, inclusion and infrastructure frameworks resulted in resounding growth,
faster fall in poverty and increased empowerment in Odisha.

Enlarged base of employment potential for unorganized workforce keep agriculture

sector a high priority sector in Odisha. The depleting share of agriculture sector to
GSDP showed sign of recovery with rise from 18% share in 2011-12 to 21.6 % in
2016-17. The exclusive agriculture budget for Odisha since 2013-14 played a vital
role. With an total outlay of Rs 14,930 crore in 2017-18, the agriculture budget
increased by 100% as compared to 2013-14 agriculture budget in the State. Small
is beautiful. Besides ongoing major and medium irrigation projects, the State

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Government is keen to implement short gestation irrigation projects under a series
of State run schemes Parbati Giri Mega Lift irrigation schem;Mukhyamantri
Adibandha Tiyari Yojana( MATY), Jalnidhi, Biju Krushak Vikas Yojana,
Micro irrigation under PMKSY etc. Odisha became the debutant State in India
to implement farmer friendly Direct Benefit Transfer (DBT) programme for farm
mechanization. Blue Revolution for fishery development, White Revolution for
animal husbandry and dairying development and Biju Krushak Kalyan Yojana
will have direct bearing on rising value additions in crop and allied sectors of the
State. The State need to put greater focus on pulses and oilseed production than
cereal production for productivity gain in crop sector. Input cost revision and skill
development for agriculture labour require to be promoted. As a natural risk prone
State, Odisha received global recognition in advanced natural disaster management
plan. That will help to counter the adverse impact of huge economic loss due to
damage in agriculture sector in the event of natural disaster.

Odisha emerged as a strong industrial power in the country in recent years.

Rational use of rich mineral resources, rising share of manufacturing sector to
GSDP due to metallic production, effective single window system, liberal policy
issues on competitive power tariff, infrastructural, market and input support, export
promotion, forest & environmental clearance, skill development on
entrepreneurship etc led to the faster industrialization in the State. Odisha is poised
for assured industrial and investment destination for the country. The State made
pioneering efforts to launch GO SWIFT,GO SMILE, MIO, GO PLUS,APAA and
GO CARE government portal projects. GO SWIFT integrates all existing
technological applications of industries via the single sign on framework. GO
SMILE relates to synchronized central inspection framework. MIO Conclave 2016,
amongst the most successful investor meets by any State, expect to promote more
number of industries from outside the State with huge investment and employment
potential in the State. GO PLUS will ensure to display real time information with
regards to industrial and associated utilities available in the State. APAA is meant
to resolve any investor queries post allotment of land by IDCO. GO CARE, a
Odisha portal, will administer corporate social responsibility and overall
expenditure as per the developmental priorities. The newly launched Odisha
MSME policy,Food processing policy, Start up policy and Apparel policy will
enhance the scope and coverage of MSME, handicrafts and handlooms industries

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along with the HRD, skill development, employment investments, production and
productivities to significant extent in future years.

The State Government concern for enhancing quality of life is encouraging.

Besides the series of human development and social sector & welfare related
schemes, the newly launched State run Mukhya Mantri Swasthya Seba Mission,
BASUDHA and UNNATI etc will have perspective improvement in human
development in the State.
The State government make focused initiatives on Long-run Development
approaches as briefly outlined below:
 Emphasis on building rural and urban productive
infrastructure.
 Higher growth rate of agriculture and allied sector.
 Strengthened social security system
 Focus on Sustainable Development Goals (SDG).
 Improvement in Governance and service delivery
mechanisms.
Promoting broad based growth, encouraging private investment, public private
partnership (PPP), public private community partnership (PPCP).

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 REFERENCES
 http://www.mospi.gov.in/collection-statistics-rule-2011 (Last visited-06/03/2019)

 http://budget.odisha.gov.in/economic-survey (Last visited-06/03/2019)

 https://en.wikipedia.org/wiki/Economy_of_Odisha (Last visited-06/03/2019)

 https://pc.odisha.gov.in/Download/Economic_Survey_2017-18.pdf (Last visited-

06/03/2019)

 https://kalingatv.com/state/odisha-economic-survey-2017-18-tabled-in-assembly/
(Last visited-06/03/2019)

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