Odisha State Overview

Odisha is rich in natural resources with an abundance of minerals, forests, lakes, and rivers. The state’s mineral reserves include over 30 percent of India’s iron ore and 90 percent of its chromite, in addition to significant resources of coal, bauxite, nickel, and manganese. Almost a third of Odisha’s land is under forest cover. The state also has a long coastline that is home to Asia’s second largest eco-system of mangroves and some of the world’s richest biodiversity.

The last decade has seen an unprecedented acceleration in economic growth in the state. Odisha’s economy grew at an average of 8.5 percent during this time - slightly higher than the national average of 8.4 percent. The state also made rapid strides in development, achieving a 20 percentage point reduction in poverty.

Growth was driven by a range of administrative, fiscal and industrial policy reforms. Financial management reforms and expenditure control mechanisms helped Odisha achieve remarkable progress in fiscal correction, reducing a serious fiscal deficit of 8.2 percent of GSDP in 2001/02 to less than 1 percent between 2008/09 and 2010/11, despite the impact of the global financial crisis. 

 

Industrial policy reforms led to an improved investment climate resulting in a sharp rise in private sector investment in industry, especially in the mining sector following the boom in the international prices of minerals. While growth between 1999 and 2000 was primarily driven by mining and quarrying, the succeeding decade has seen diversification and a remarkable growth in the manufacturing and services sectors.

The state is now looking to the private sector for expanding employment and is focusing on community empowerment programs to reduce poverty. Agricultural growth is of particular importance given the dependence of 70 percent of the population on the land for livelihood, and the sector requires investment. Growth in mining and ancillary industries, such as steel and aluminum, could create higher productivity jobs. 

 

The creation of a healthy, educated and skilled labor force that can move from traditional low-productivity occupations to industries and services is key to inclusive growth. Special emphasis will also need to be given to alleviating poverty and improving the human development indicators of the most vulnerable groups, especially of the large tribal populations - Scheduled Tribes (ST) and Scheduled Castes (SC) make up more than 40 percent of Odisha’s population and have a higher incidence of poverty