Odisha economy undergoing structural changes: Economic Survey

Odisha (Orissa)’s subsistence economy is finally getting a facelift if the Economic Survey, 2009-10 brought out by the state government is to be believed.

Odisha clocked an annual average growth rate of 8.73% in first three years of 11th Plan and the State Economy has grown at an annual average rate of 9.51% during 10th Plan against the target of 6.20% for 9th Plan notwithstanding the global slowdown.

Reforms carried out since 1990 seems to be paying off with the state economy undergoing a structural change like never before with the domination of service sector becoming more and more pronounced.

In service sector, the trade, hotels and restaurants sub-sector contributes 25% of value in current price, making it the most important individual sub-sector. This is followed by transport and communications (17%). The banking and insurance sub-sectors constitutes 6% of service sector.

As per the advanced estimate for 2009-10, the service sector accounted for 55% of the Gross State Domestic Product (GSDP) for Odisha followed by industry (25%) and agriculture (20%) in 2008-09, according to the Survey.

However, the worrying fact, the Survey admits is the highest growth fluctuation in agriculture and allied sectors, which engage 60% of the state’s workforce. The total food grains production has had a fluctuating trend with small growth rate since 2002-03.

The Survey finds that compared to the all India average, the yield rate of rice production is less. In 2008-09, it was 15.29 quintal per hectare against the national average 21.86 quintal per hectare. Lack of irrigation still remains a major stumbling block in enhancing agriculture productivity. Irrigation coverage remains lowly 31% compared to national average of 44%. The rate of fertilizer use in the state remains lesser than the national average.

Nevertheless, the state’s high economy growth rate is largely due to late burst of manufacturing activities in steel and metal. While in producing steel, Odisha (Orissa) retains 10% of total capacity of the nations, while it has 25% of total iron ore reserves in the country, the state tops in the country in aluminum both in terms of production capacity and actual output. This has happened after Vedanta Aluminum Limited has started to produce aluminum in addition to Nalco, the Survey says.

Souce: ET