Economy of Odisha
Economy of Odisha has remarkable agricultural as well as industrial production within India. Odisha is the first state in the country formed on linguistic basis in 1936 having rich heritage in art and culture and gifted with abundant natural resources.
Odisha is one of India's leading Information Technology, Industrial, Education, Healthcare destination. Odisha's industry is mineral based and mineral contribution in its value is highest in the country. This state is a highest producer of aluminum in India. Important minerals in Odisha are iron ore, coal, bauxite, chromite, manganese and graphite. Odisha made an impressive real growth rate of 8.09% in 2012-13. Odisha made a growth rate of 11.01% in agricultural sector,
- Odisha is the most favourite foreign direct investment destination for investors across India - Associated Chambers of Commerce and Industry of India (ASSOCHAM)
- Odisha emerged as the hottest investment destination for new projects across India - Reserve Bank of India
- Odisha is one of the leading states in the country to have had the fastest reduction of poverty by 24.61% - Odisha Economic Survey 2013-14, Planning and Coordination Department, Government of Odisha
- Odisha contains a fifth of India's coal, a quarter of its iron ore, a third of its bauxite reserves and most of the chromite.
The share of agriculture sector in the state's GSDP has been declining over the years and expected to grow at the rate 16.1 percent over the years and provides more than 60 percent employment to Odisha's people. This sector has always been disturbed through natural calamities, yet it can grow with 16.1 percent in 2012-13. Paddy still continues to be the dominant crop in Odisha and it constitute 90 percent of the total food grain production. the cropping intensity in Odisha has been increased from 158 to 166. The problem of adequate irrigation still remains a major problem. Encouraging credit and Scientific vigor in rural economy of Odisha with easy access to credit and secured crop insurance as well as wastage management of food product and storage system in every panchayat may help this state a larger food producer in India.
Odisha is exceptionally well in industrial growth among other states in India. Odisha's industries are mostly mineral based and retain 10 percent of total capacities of the nation. Odisha is the most favored foreign direct investment destination in India. 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, PricewaterhouseCoopers and Infosys have large branches in Odisha. IBM, 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.
Odisha boasts three of the major ports in India i.e. Paradip Port, Dhamra Port and Gopalpur. 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.