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Industrial Development & Economic Growth in Odisha

July, 2019

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, and tin ore. At 40.7 per cent in 2018, Odisha contributed the largest share of mineral production India in terms of value. Value of minerals produced in the state reached Rs 30,170.22 US$ 4.28 billion) in 2018-19.

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 among the largest producers of iron and steel in India. Total production of iron ore in Odisha stood to at 113.05 million tonnes during 2018-19.

The state's economy witnessed high growth rates between 2015-16 and 2019-20, with Gross State Domestic Product (GSDP) expanding at a Compound Annual Growth Rate (CAGR) of 12.70 per cent.

Odisha has emerged as a key state with regards to the mineral and metal-based industries.

It is the first state in India to have undertaken reform and restructuring initiatives in the power sector. As of March 2020, Odisha accounted for a total installed power generation capacity of 8,566.59 megawatt (MW), comprising 3,828.22 MW under state utilities, 2,771.39 MW under private sector, 1,996.68 MW under central utilities.

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.

Odisha has vast potential for development of tourism. It is one of the critical sectors of the state’s economy, in terms of foreign exchange earnings as well as employment generation opportunities. In 2018, 15.20 million domestic tourists and 110,818 foreign tourists visited Odisha.

The state attracted Foreign Direct Investment (FDI) inflow worth US$ 605 million during April 2000 and March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Investment intentions filed in the state is Rs 29,826 crore (US$ 4.27 billion) in 2019.

Below are some of the major initiatives taken by the Government to promote Odisha as a promising investment destination:

  • In June 2020, ArcelorMittal Group announced its plans to invest Rs 2,000 crore (US$ 283.73 million) in the state to expand its pellet plant at Paradip and increase its production capacity from 6 million tonnes per annum (MTPA) to 12 MTPA.
  • Total merchandise export from Odisha were US$ 6.303 million in FY19 and US$ 3.26 billion during April-September 2019. 
  • In November 2019, JSW Infrastructure commissioned a new iron ore terminal in Paradip port. The terminal can load these vessels at a rate of 100,000 tonnes a day.
  • By 2022, Odisha plans to reach generation of 2,200 MW of solar power, 200 MW of wind power,180 MW of bio-mass power, 150 MW of small hydro power and 20 MW of Waste-to-Energy (WTE) power.
  • In December 2019, the State Government announced increasing bed capacity in major hospitals including Mother and Child Healthcare Center (MCH).

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