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Agriculture Industry

Orissa Economy

Farmer in field, OrissaOrissa lives in village. As such occupation of its majority population is agriculture. Orissa has been contributing to the national coffers with extremely good production of rice. In fact Orissa contributes one tenth of the total rice produced in the country. Other agricultural produce of the state include Jute, oilseeds, pulses, sugarcane etc. Apart from agriculture, Orissa has a considerable say in the production of handicrafts with excellent craftsmen who produce diverse crafts that are in demand internationally. In fact its handicrafts form a major chunk of goods exported from Orissa. Orissa also enjoys nature’s bounty in mineral, marine, agriculture and forest wealth .Although marine and forest produce has been a major contributor to its economy, it is the mining sector which of late has been responsible for turnaround of the state.

Opn cast coal mines in OrissaOrissa has abundant reserves of coal, iron ore, bauxite, chormite, limestone, dolomite and manganese. It also has tin, nickel, vanadium, gemstones and granite. Of late, vast potential of diamond and gold has been indicated. Water resources are also plentiful. Traditionally, despite the mineral bounty, Orissa has remained a non performer in the industrial scenario.

However active government support that encourages industrialization coupled with investments from giant multi national companies has led to considerable turn around in the industrial scenario of the state in the past few years. A latest World Bank report applauding the stupendous performance of the state in the industrial front stands testimony to this fact. Calling it the greatest turnaround by an Indian state, the World Bank report concludes that owing to aggressive industrial policy, Orissa has achieved the biggest success in coming out of the red among all other states in the country. Orissa, which managed to post a surplus of 0.64% of its gross state domestic product in its revenue account as early as 2005-06 was also the first state to achieve the lowest fiscal deficit, or gross borrowing of 0.37% in that year, from 7.56% in 2001-02.Owing to an industrial growth of over 20% in the fiscal 2006-2007, Orissa managed the smartest turnaround among all states, wiping out its primary deficit (when it had to borrow just to pay interest obligations on past debt) from 5.9% of state domestic product, and bringing it down to a surplus of 2.8% in 2006. Latest reports of planning commission has put the growth rate of the state for the year 2009-2010 at around 8.2% which is at par with national G.D.P rate. Also the state has been the third fastest developing state of the country and stands next only to Gujrat and Bihar in recording extraordinary growth rates.

The credit for all this achievement goes to the government of Orissa which has actively encouraged investments in the industrial sector and has successfully wooed giant corporations from around the world to set up industrial units in the state. The list of the companies that have set up industries or propose to do so in coming years in the state has increased dramatically and includes names of some of the respected companies around the world like Tata, Arcelor Mittal, Hindalco, NALCO, POSCO ,Reliance , Vedanta and Magnitogorsk Iron and Steel Company (MMK). At $125 billion, or about Rs5.25 trillion, the ongoing investments in the state are almost three times the state domestic product. It is thus natural for the state to have maintained a growth rate of 10% consistently from the past three years from 2006.Luring investment in the state are also factors like low infrastructure cost and even lesser cost of doing business here.

 Dhamra Port, one of the largest in IndiaThe State Government realizing the potential of the mineral resources and the long coastline in the state has made every effort to make Orissa one of the premier industrial zones in the country. It is promoting ports, developing infrastructures, connecting strategic locations apart from providing sops to companies setting up industries in the state. The upcoming Paradip port is slated to be the deepest port of the country and the largest in the eastern region. This would provide an easy transit point for various multinational companies to procure or send the raw materials and other goods. Although Paradip is Orissa's only large port, the coastal towns of Dhamra and Gopalpur are being developed into major ports as well.

The government of India has selected the coastal region of Orissa, stretching from Paradip in the north to Gopalpur in the south, to be developed as one of the five or six Special Economic Regions (SERs) of the country. The government of India and the state government of Orissa would work together to erect world class infrastructure in this region along the lines of the Rotterdam, Houston, and Pudong regions. This would stimulate further private investment in petrochemicals, steel, and manufacturing. Similarly wide network of new railway linkages connecting and strategic resource bearing locations are fast emerging in the state.

With all these advantages Orissa is slated to become a major destination of steel plants, thermal power plants, Alumina/Aluminum projects and oil refineries in the coming years. The projects/proposals in hand include 13 steel plants, half a dozen large power projects, 3 alumina/aluminium projects and two green field oil refineries - most of them by major national and international enterprises. A recent Morgan Stanley report forecasts that Orissa would be flooded with massive investments for manufacturing related activities in the same manner that Bangalore had attracted software investment in the 1990s. The scale of the investments in Orissa would, however be much higher.

With positive results pouring in, the prospects of the economic growth of the state seem slated to go in the northward direction only.