Economy Of Odisha

The anticipated growth rate of Odisha economy during 2014-15 has been estimated as 8.78 percent at 2004-05 prices in Market prices. The State economy is expected to recover strongly in 2014-15 after a sluggish growth rate of about 2.21 percent in 2013-14 that occurred due to the adverse impact of the natural shocks and industrial recession during the year. The State witnessed the falling share of agriculture sector to overall GSDP as well as fluctuating trend of growth rates for last few years.

The share of agriculture & animal husbandry sector to GSDP of Odisha remained 15.1 percent, 13.1 percent and 12.3 percent in 2012-13, 2013-14 and 2014-15 respectively. Major factors like natural shocks of floods, droughts, severe cyclone etc and price variations in agricultural products contributed significantly to the varying degrees of growth rates, mostly negative growth rates in the last decade between 2004-05 and 2014-15. During the last three years agriculture sector has witnessed a very fluctuating growth trend. The sector recovered strongly with a higher growth rate of 12.3 percent in 2012-13. However this recovery in the growth rate was short lived as the severe cyclone “Phailin” followed by heavy floods very adversely impacted coastal Odisha during 2013-14 resulting in a negative agricultural growth rate.

The Industry and Services sectors have emerged as main drivers of growth during the past decade. In real terms at 2004-05 prices, Odisha economy exhibited an average annual growth rate of 8.82 percent during the 10th Plan period against a target of 6.20 percent. The economy grew in real terms at the rate of 7.05 percent during the 11th Plan. The standard of living in Odisha has improved over the years with the rise in real per capita income. But the continuing gap in real per capita income between India and Odisha is a matter of concern. Odisha economy is diversifying at a faster rate and though the State economy still continues to be adversely impacted by frequent natural shocks, it has acquired some resilience to such natural shocks. This has happened because of transformation in the economy from “agriculture based” to “industries and service sectors driven”. As can be seen from the time series data of State income estimates, the share of Agriculture sector has steadily declined over the years and the share of Industry and Services sectors have been increasing over the years. As per 2014-15 (advance estimates), share of the Services sector (as per CSO classification) is expected to be about 51.2 percent of the Gross State Domestic Product (GSDP) followed by those of the Industry (33.4 percent) and the Agriculture (15.4 percent) in real terms at 2004-05 prices. The growth patterns also exhibit similar trend at All India level. The high growth rates recorded by the State in the 10th and 11th Five Year Plans were mainly due to high growth registered by the Industry Sector and the Services Sector. The performance of the Agricultural Sector continues to be highly volatile mainly due to adverse impact of natural shocks such as cyclones, droughts and floods. The Services sector has been growing in a comparatively stable manner. The district-wise analysis of GSDP reveals that among the districts, Sundergarh has the highest percentage share of State’s GSDP with 8.54 percent followed by Khorda 7.52 percent and Deogarh contributed least share of 0.53 percent of GSDP in 2010-11. In 2010- 11, the real per capita net district domestic product at 2004-05 prices was highest for Jharsuguda district and lowest for Nabarangpur district. The workers’ participation ratio in Odisha at 41.8 percent was slightly higher than 39.8 percent at the national level in 2011. The share of marginal workers in the total workforce increased substantially from 33 percent in 2001 to 39 percent in 2011, while the share of main workers declined from 67 percent in 2001 to 61 percent in 2011. The share of total workers in the Agricultural sector, i.e., both cultivators and agricultural workers, declined from 64.7 percent in 2001 to 61.8 percent in 2011. This indicates that, although the majority of population in the State still depends on agriculture directly or indirectly, the State economy has been diversifying and there is a shift moving away from the Agricultural sector to non-farm sectors.

As per the NSS data, the rate of unemployment in the State has fallen lately - from the 61^st round (July 2004-June 2005) to the 68th round (July 2009-June 2010). This stands true for both rural and urban areas and among casual workers and also those who have full time jobs. But the State’s unemployment rate in rural area is marginally higher than the national rate of unemployment, while it is lower than all India average in case of urban areas. The share of employment in the public sector continues to be higher than that in the private sector, although the latter has shown steady increase. It is, however, heartening to note that the share of women employees in the organized sector has been steadily increasing and has stood at 16 percent in 2012. The cost of living in urban Odisha which used to be lower than the rest of India in the past, is not so any more. However, the cost of living in rural Odisha continues to be one of the lowest in the country.