ON CUSP OF CHANGE

Odisha has done well on GSDP growth. It is now look­ing to at­tract value-added play­ers in the met­als space and rev up its MSME sec­tor.

Business Today - - THE HUB STATES - by SONAL KHETARPAL

OVER THE LAST 15 years, Odisha has been sin­gle-mind­edly fo­cused on fast GSDP growth and be­com­ing the coun­try’s top alu­minum and stain­less steel pro­ducer with the help of big in­vest­ments. The ef­forts have paid off. It is now a hub for pri­mary met­als with pres­ence of big metal com­pa­nies such as Tata Steel, Bhushan Steel and JSPL. It ac­counts for one-fifth of the coun­try’s steel pro­duc­tion and al­most half its alu­minum pro­duc­tion. Also, its GSDP growth has been sur­pass­ing the na­tional rate for some years, mainly due to rich min­eral re­serves. The state, af­ter all, ac­counts for 52.3 per cent of In­dia’s iron ore, 21.6 per cent of coal and 49.7 per cent of baux­ite de­posits. Now, the state is on the cusp of change as it looks to move from be­ing a sup­plier of raw ma­te­ri­als to a maker of value-added prod­ucts. For that, it has built a down­stream park in Kalin­gana­gar, an area which has steady sup­ply of raw ma­te­rial. “The state gov­ern­ment has given ap­proval in prin­ci­ple to Jin­dal Stain­less and Jin­dal Steel and Power. Vedanta and Hin­dalco have also sent pro­pos­als. We are fol­low­ing up with the Tatas,” says Sanjiv Cho­pra, Prin­ci­pal Sec­re­tary (In­dus­try), Odisha.

The state has iden­ti­fied six sec­tors for at­tract­ing in­vest­ments un­der Vi­sion 2025. Th­ese in­clude down­stream in­dus­tries; food pro­cess­ing and sea food; plas­tics, chem­i­cals and petro­chem­i­cals; ESDM (Elec­tronic Sys­tem De­sign and Man­u­fac­tur­ing) and IT/ITeS; tex­tiles and ap­par­els; and tourism. To pro­mote th­ese sec­tors, it has de­vel­oped sec­tor-spe­cific clus­ters

such as a Na­tional In­vest­ment and Man­u­fac­tur­ing Zone in Kalin­gana­gar, an Alu­minum Park in An­gul, a Plas­tics Park in Paradip, and a Sea Food Park in Deras, among oth­ers. The alu­minum park will lever­age Orissa’s baux­ite re­serves. The park will be the first such in the sub­con­ti­nent with a fa­cil­ity to di­rectly ob­tain molten alu­minium from the smelter. The plas­tics park will get feed­stock such as polypropy­lene and eth­yl­ene de­riv­a­tives from an In­dian Oil plant just 5 km away.

Apart from work­ing on build­ing in­fra­struc­ture, the gov­ern­ment has also in­tro­duced a pol­icy for pri­vate in­dus­trial parks. “We are prob­a­bly the only state in the coun­try that en­cour­ages pri­vate in­dus­trial parks where gov­ern­ment gives 50 per cent sub­sidy for in­ter­nal in­fra­struc­ture and also funds the ex­ter­nal in­fra­struc­ture,” says Cho­pra.

Th­ese parks will help Odisha kick-start an MSME boom. Tra­di­tion­ally, the state has been fo­cused on large in­dus­tries, which has led to growth but not cre­ated the de­sired num­ber of jobs. The Re­serve Bank of In­dia data for 2015 pegs the state’s un­em­ploy­ment rate at 3.8 per cent, slightly more than the na­tional av­er­age of 3.7 per cent (2015/16), but more than that of sev­eral states. A World Bank re­port says jobs in Odisha grew just 0.7 per cent from 2005 to 2012. Half the state’s pop­u­la­tion still de­pends on farm­ing. Ac­cord­ing to the Min­istry of Mi­cro, Small & Medium En­ter­prises An­nual Re­port 2017/18, the num­ber of MSMEs in Odisha is 19.84 lakh com­pared to Ut­tar Pradesh’s 89.99 lakh and West Ben­gal’s 88.67 lakh.

“The gov­ern­ment has been try­ing to pro­mote in­dus­trial parks for quite some time. Take the case of Alu­minum Park that has been there for the last five years but has not at­tracted in­vestors as there isn’t much in­fra­struc­ture around the area,” says Dil­lip Sat­a­p­a­thy, Busi­ness Stan­dard Res­i­dent Edi­tor in Bhubanesh­war.

Ac­cord­ing to the CMIE, new in­vest­ments an­nounced in Odisha in­creased a whop­ping 504 per cent from 2016 to 2017 at ` 2,06,939.49 crore. They again re­duced sharply from 2017 to 2018 by 81 per cent to ` 48,891.6 crore. The state is also try­ing to ur­gently re­solve the is­sue of dis­place­ment of peo­ple due to large in­dus­trial projects. To tackle this tricky is­sue, which has led to sev­eral con­tro­ver­sies in the past, it plans to de­pend on its 1,25,000 acres land bank in­stead of ac­quir­ing land from pri­vate per­sons, ex­cept as a last re­sort. The New Delhi-based Cen­tre for Sci­ence and En­vi­ron­ment (CSE), in a re­port, Peo­ple First: Dis­trict Min­eral Foun­da­tion Sta­tus Re­port, says even af­ter three years of the Cen­tre rolling out the Dis­trict Min­eral Foun­da­tion (to ben­e­fit min­ing-af­fected peo­ple), it has failed to iden­tify both min­ing-af­fected peo­ple and min­ing-af­fected ar­eas. The state, with its huge min­eral de­posits, needs to fo­cus specif­i­cally in this area.

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