Bhubaneswar: Odisha’s economy is estimated to grow at 7.8 per cent in real terms in comparison to the national rate of 7 per cent during the current financial year 2022-23, the state’s economic survey report said.
The Odisha Economics Survey Report for the year 2022-23, tabled by Finance minister Niranjan Pujari also projects economic growth in the range of 8 to 8.5 per cent for the financial year 2023-24 in real terms.
Assuming a favourable monsoon, no further disruption in global supply chains and moderation in inflation, the grow range of 8 to 8.5 per cent seems feasible for Odisha in FY 2023-24 in real terms, the report said, adding that the state is expected to grow at a rate higher than the national average growth.
The industry and service sectors have been the major engines of economic growth in the state, the report said.
“During the pre-COVID period (2012-13 to 2019-20), the average growth rate of Odisha’s economy was 7.1 per cent. The decade of 2021-30 is expected to work in favour of India given its demographics structure, usage of technology, push for innovation, competitive and cooperative federalism, stable government. Odisha has all the resources to benefit from a high growth environment in the country and deliver prosperity for all,” the report said.
In 2021-22, the state’s GSDP grew by 11.5 per cent. Odisha’s growth resilience is reflected in its average medium-term growth rate of 7.9 per cent from 2013-14 to 2021-22, leaving aside the pandemic years.
The report mentioned that the state’s economy recovered from COVID-19 induced economic shocks in 2022-23. But, due to Russia-Ukraine war led disruption in global supply chains and upward movement in energy and other commodity prices, the inflation 2022-23 has gone up. In Odisha, the average inflation till December 2022 was 6.56 per cent higher than 3.7 per cent in 2021-22.
Agriculture and allied sectors constitute nearly 22.5 per cent of Gross Value Added (GSVA) (2022-23 AE). The sector employs more than 40 per cent of the workforce, thus being the biggest employment generating sector in Odisha. This sector is expected to grow at 5.9 per cent in 2022-23 as against 3.5 per cent at all-India level.
Similarly, the industry sector, which has been the key growth driver in the state, has recorded the highest growth on average in the pre-COVID-19 times (7 per cent). In 2022-23, the industry sector is expected to grow at 6.1 per cent, as per the report.
The mining sector constitutes more than 10 per cent of GSVA. Therefore, any movement in mining activity impacts not just the mining sector but also the manufacturing sector and other sectors through backward and forward linkages, it said.
The third major sector, the Services sector, is expected to grow at 8.8 per cent in 2022-23, higher than pre-COVID average growth. The sector constitutes nearly 36 per cent of GSVA in 2022-23.
Another major aspect of the report is the per capita income of Odisha which has multiplied thrice between 2011-12 and 2022-23 while at all India level, it is multiplied by 2.7 times.
Odisha’s per capita income grew at an annual compound rate of 10.9 per cent against 9.4 per cent CAGR of India’s PCI.
“The state’s rate of growth in PCI is much faster than the national rate of increase thus successfully reducing the gap,” the report said, adding that Odisha’s PCI at present (2022-23) is Rs 150,676 in current price as against All India average PCI of Rs 170,620 (current price).
The state has been under revenue surplus continuously for the last 17 years since the enactment of the Fiscal Responsibility and Budget Management Act (FRBM), the report said, adding that the total outstanding liabilities as percentage of GSDP stood at 15.6 per cent in 2022-23.
Odisha is among six highest spending states in the country. In 2020-21, the total public expenditure (revenue expenditure plus capital outlay) of the state was 21.3 per cent of GDP.
The state has also invested heavily in building capacity for growth. The state is one among the two highest spenders on capacity creation as proxied by capital outlay as a percentage of GSDP. In 2020-21, the state spent 3.4 per cent of GSDP under capital outlay.
Having more than 35 per cent of the country’s natural resources and huge reserves of iron ore, bauxite, coal, and other natural resources, with a skilled workforce, the state would continue to grow at a faster rate, the report said.