Bhubaneswar: Odisha, the mining and manufacturing hub of eastern India, is on a different growth trajectory. For the last few years the state’s economy has witnessed a paradigm shift from the mining and steel manufacturing hub to a services sector driven one.
The Economic Review for the year 2019-20 presented by the Finance Minister Niranjan Pujari in the Odisha Assembly clearly shows the State’s economy is inclined towards the labour intensive services sector. It has become the key component of the economy having a 41.6 percent share of the Gross State Value Added. Compared to this the industries sector has a contribution of 39.5 percent to the GSVA.
The mining sector, which had been the mainstay of the state’s economy in the last few decades contributed about 10.8 percent to the state’s GSDP. On the other hand, the manufacturing sector has a share of 18.5 percent. While the IT and ITES sectors are having a good growth in the state, the BPO and KPO services also witnessed considerable growth. The employment rate is also growing in these services sectors.
The IT sector in Odisha employs more than 18,000 people and the state government wants it to be more than 30 thousand in the coming years. Through the ICT policy, the Odisha Government is offering incentives like reimbursement of Goods & Service Tax (GST) both to new and existing units, replacing VAT. The provisions made for the new industrial units in IT, ITes (IT-enabled services) and ESDM (electronics system design & manufacturing) for entitlement to State GST reimbursement for five years from the date of commencement of business operations is attracting a good number of outsiders to set up shop in Odisha.
The services sector in Odisha grew at a double digit rate of 13.1 percent, and has been the second largest generator of employment after agriculture.
Odisha’s tourism sector which saw a declining trend in the last few years saw an upward trend in the last fiscal. The government’s initiatives such as organization of international sporting events have started showing results. The starting of International flights from the Biju Patnaik International Airport has also helped a bit in the flow of passengers and freight cargo from and to Bhubaneswar.
The services sector employs more than 25 percent of the total workforce in the state. Also, the wages in the services sector have grown much better in the last few years. Odisha witnessed a rise in per capita income and improvement in the socio-economic indicators. Niranjan Pujari’s budget for the financial year 2019-20 presents a robust picture of the Economy. The Budget figures show, the state is poised to achieve a growth rate of 8 to 8.5 percent – more than that of the country in the coming fiscal. Odisha government’s intention to invest considerably in the physical infrastructure is intend to push economic activities and attract manufacturing and service industries and service industries.
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