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Industrial Development & Economic Growth in Odisha

Last updated on Aug, 31 2021

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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. Odisha has emerged as the key state with regard to the mineral and metal-based industries. In 2019-20^, Odisha contributed to the largest share (35.3%) of mineral production (by value*) in India. Value* of minerals produced in the state reached Rs. 70.54 billion (US$ 951 million) in 2020-21^.

Odisha accounts for over 55% 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. In 2020-21, total exports of iron ore from Odisha stood at US$ 2,116.07 million (~20.7%).

The state’s economy witnessed high growth rates between 2016-17 and 2020-21, with GSDP of the state growing at a CAGR of 6.72%. Cumulative FDI inflows in the state amounted to US$ 30.06 million between October 2019 and December 2020.

Odisha has emerged as a key state with regard 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 April 2021, Odisha accounted for a total installed power generation capacity of 8,594.47 megawatts (MW).

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 2019, 15.30 million domestic tourists and 115,128 foreign tourists visited Odisha.

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

  • Total merchandise exports from Odisha stood at ~US$ 6.66 billion in FY20 and US$ 10.22 billion in FY21.  
  • 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 Union Budget 2021, Odisha allocated 6.4% of its total expenditure on health, (higher than the average allocation for health by other states (5.5%)), 7.5% on rural development (higher than the average allocation for rural development by other states (6.1%)) and 7.8% on roads and bridges (higher than the average allocation by states (4.3%)).
  • In Maritime India Summit 2021, the government announced to establish Odisha as the hub of maritime trade.
  • In March 2021, ArcelorMittal-Nippon Steel India and the Odisha government signed a MoU to establish a 12 MT integrated steel plant in the state, with an investment worth Rs. 50,000 crore (US$ 6.88 billion).
  • In October 2020, the state government launched 12 different industrial projects with a combined investment of Rs. 8,796.61 crore (US$ 1.20 billion). The projects include 8 MSME and 4 large projects in sectors such as health care, renewable energy, steel, IT, cement, and food processing. These 12 industrial units will generate employment opportunities for 7,090 people in the state
  • In December 2020, the Ministry of Port, Shipping, and Waterways agreed to the Odisha government’s proposal for the riverine port to be developed by the Paradip Port Trust at an investment of Rs. 4,000 crore (US$ 547.46 billion). The project is estimated to generate employment for 6,000 people.

*- Excluding fuel minerals, atomic minerals and minor minerals, ^- Until September 2020

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