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Industrial Development & Economic Growth in Odisha

March, 2018

Odisha is one of the most mineral-rich states in India. Key minerals found in the state are iron, coal, bauxite, manganese, nickel, chromite, limestone, dolomite, graphite, decorative stones, beach sand, China clay, tin ore, etc.

Odisha accounts for over 55 per cent of India’s bauxite reserves, making it an ideal location for setting up aluminium and aluminium-based companies. The state ranks first in the country in terms of both production capacity and actual output of aluminium.

Odisha is one of the favoured investment destinations for domestic and international iron and steel players as well as one of the largest producers of iron and steel in India. The total production of iron ore in Odisha was recorded to be 94.2 million tonnes and 49.03 million tonnes during 2016-17 and April-September 2017, respectively.

Between 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 10.70 per cent to US$ 60.6 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 10.7 per cent to US$ 53.5 billion.

Odisha is amongst the top ten states accounting for the highest number of MSME enterprises. The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Policy Resolution, 2015. Additionally, the state has sector-specific policies for IT and micro, small and medium enterprises. The state government has constituted "Team Odisha" to help with investment promotion.

The following are some of the major initiatives taken by the government to promote Odisha as an investment destination:

  • The Odisha Cabinet has approved the Odisha start-up policy, aimed at setting up at least 1,000 start-ups over the next five years and bringing the state amongst the top three start-up hubs by 2020.
  • In order to increase the employment opportunities in the state, Odisha government has announced plans to invest US$ 28.69 billion in the manufacturing sector generating nearly three lakh job opportunities by 2020.
  • In January 2018, the state government has given approval for five investment proposal including two Angul Aluminium Parks worth Rs 328 crore (US$ 50.66 million).
  • In June 2015, in an effort to increase the traffic of foreign airlines in the state, the state government exempted the Value Added Tax (VAT) imposed on aviation turbine fuel.
  • In July 2015, the state government announced plans to frame a rural Business Process Outsourcing (BPO) scheme under which subsidies are planned to be offered for establishing BPO units. In places where STPI (Software Technology Parks of India) stations are situated, employment opportunities are expected to be generated in the state. STPIs in the state are located in Bhubaneswar, Balasore, Rourkela and Berhampur.
  • As per budget 2016-17, US$ 39.71 million has been proposed by the state government for developing new railway projects such as the ongoing Khurda-Bolangir line, new Jaypore-Malkangiri, Jaypore-Nabarangpur railway lines, etc. in the state through direct state funding.
  • As per state budget 2016-17, the state government allocated US$ 1.52 million for development and enhancement of eco-tourism in Odisha.
  • A biopharma IT park at Bhubaneswar is being established under the public private partnership (PPP) model over a land area of 64.68 acres.
  • A mega food park is being established near Bhubaneswar over 282 acres through the PPP mode. Odisha Industrial Infrastructure Development Corporation (IDCO) is the nodal agency for the establishment of this park.
  • In order to strengthen the artisan-based enterprises in the handicrafts sector, 19 handicraft training centres are functioning in different districts.

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