Economy of Odisha
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Odisha was once the poorest states of India, but as of now it is 7th poorest (2009–10) due to very high growth rate for the last decade. poverty reduced by a phenomenal 21% in the past 5 years according to the planning commission of India . The proportion of population living below $1 (PPP, around $0.25 in nominal terms(2004–05)) a day was 43%, more than in countries such as Malawi.
This is a chart of trend of gross state domestic product of Odisha at market prices estimated by Ministry of Statistics and Programme Implementation with figures in millions of Indian Rupees.
|Year||Gross State Domestic Product|
Odisha's gross state domestic product for 2004 is estimated at $18 billion in current prices.
Following India's independence, Odisha had not been a focus of investment by the central government, causing its infrastructure and educational standards to lag behind the rest of the nation. For instance, only about 20% of the road network was paved. In rural areas over 65% of the population have no access to safe drinking water. This has led to a widespread misbelief among the local population that Odisha is a neglected state. But, in the current year the per capita investment in the state is the highest in the country and it is the focus of investment from foreign investors.
Odisha has abundant natural resources and a large coastline. It contains a fifth of India's coal, a quarter of its iron ore, a third of its bauxite reserves and most of the chromite. Rourkela Steel Plant was the first integrated steel plant in the Public Sector in India. It receives unprecedented investments in steel, aluminium, power, refineries and ports. India's topmost IT consulting firms, including Satyam Computer Services, TCS (Tata Consultancy Services), MindTree Consulting, PricewaterhouseCoopers and Infosys have large branches in Odisha. IBM, Syntel, Cognizant, Bosch and Wipro are setting up development centers in Odisha. So far, two of the S&P CNX 500 conglomerates have corporate offices in Odisha, for example, National Aluminium (2005 gross income Rs.51,162 million) and Tata Sponge Iron (2005 gross income Rs.2,044 million).
Odisha is notable as one of the first Indian states to have tackled its structural problems during the post-1994 Indian economic reforms. Odisha was the first state in India to begin to privatise its electricity transmission and distribution businesses. Over the period between 1994 and 2000 Odisha's former state electricity board (SEB) was restructured to form Gridco. This corporation was then divided into Transco and a collection of distribution companies. Attempts were then made to sell the distribution companies to the private sector. Like many other states, in 1996 Odisha was losing over 50% of the electricity it was delivered. The scale and importance of these reforms is notable and an important milestone in India's dramatic economic development.
Recently the number of companies who have signed Memorandum of Understanding (MoUs) to set up steel plants in the state has gone up to 50, including Posco of South Korea which has agreed to construct a mammoth $12 billion steel plant near Paradip port. It would be the largest single investment in India's history. Arcelor-Mittal has also announced plans to invest in another mega steel project amounting to $10 billion. Russian major Magnitogorsk Iron and Steel Company (MMK) plans to set up a 10 MT steel plant in Odisha too. The state is attracting an unprecedented amount of investment in aluminum, coal-based power plants, petrochemicals, and information technology as well. In power generation, Reliance Industries (Anil Ambani Group) is putting up the world's largest power plant with an investment of US $13 billion at Hirma in Jharsuguda district. Vedanta Resources’ 1.4 million tonne alumina project in Kalahandi district is the largest investment in aluminium. Vedanta has also announced a $3.2 billion huge private University project on the lines of the Ivy League Universities, which is unprecedented in the history of education in India.
The Central Government has agreed to accord SEZ (Special Economic Zone) status to eight sites in Odisha, among which are Infocity at Bhubaneswar and Paradip. But all these plans are facing massive resistance from the people of the state who mainly depend on agriculture for livelihood. Some vested interests are pushing ahead projects of Mittal, Tata, Vedanta, Birlas causing many human rights violations. Flood and cyclone are the major hurdle in Odisha's development as the important districts are situated nearer to the Bay of Bengal.
Although Paradip is Odisha's only large port, the coastal towns of Dhamra and Gopalpur are being developed into major ports as well. The government of India has selected the coastal region of Odisha, stretching from Paradip in the north to Gopalpur in the south, to be developed as one of the five or six Special Economic Regions (SERs) of the country. The government of India and the state government of Odisha would work together to erect world class infrastructure in this region along the lines of the Rotterdam, Houston, and Pudong regions. This would stimulate further private investment in petrochemicals, steel, and manufacturing. A recent Morgan Stanley report forecasts that Odisha would be flooded with massive investments for manufacturing related activities in the same manner that Bangalore had attracted software investment in the 1990s. The scale of the investments in Odisha would, however be much higher. As of July 2006, the total planned investment in the state is a whopping $90 billion. This includes some investment in research, education, hospitals, roads, ports, airports, and hotels. There are many multi-state irrigation projects in development, including Godavari River Basin Irrigation Projects.