Amidst a dark cloud over the nation’s economy due to the surging pandemic, Odisha sees a silver lining as some of the sectors are on revival mode, particularly, the industrial sector. The State has received investment proposals of Rs 17,514 crore between April to August 2020 against only Rs 1,978 crore during the same time last year.
This is an indication that the corporate world has recognized Odisha’s potential to make use of the investment well. Even the state has surpassed many developed states including Maharashtra and Gujarat in terms of investment proposals.
This is just a major indicator of Odisha getting back to the track much before than others. During this time, Odisha has received 211 investment proposals of which 99 have been approved in the five months of 2020 against approval of 127 projects of the 223 proposals in 2019.
Though there is a slight reduction in the number of proposals received, there has been a significant improvement in terms of proposed investment and employment expected from the new proposals.
However, under the leadership of Chief Secretary Asit Tripathy, the state can avail the fruits if the proposed investments flow within stipulated time thereby boosting Odisha’s economy. Despite the pandemic, Chief Minister Naveen Patnaik has interacted with two top corporate heads like L N Mittal and Sajjan Jindal and wooed them to expedite their projects which will certainly benefit the state.
Simplification of process, setting up Single Window Clearance, Ease of Doing Business and major moves to facilitate the revival of economic growth, have built the confidence of investor, feels Principal Secretary Industry, Hemant Sharma.
However, the state has major challenges like collection of tax revenue during April to July due to the pandemic. While the amount was just Rs 3,445 crore during the period, it was Rs 4,540 crore last time, a decline of approximately 24%. The state needs to improve the revenue collection after the Unlock-4.
Now that the shops, business establishments, mining activities, industrial and hospitality sectors are opening up, the tax revenue collection will certainly increase as seven more months are left during 2020-21 fiscal.
However, of late the significant GST collection in April 2020 as compared to April 2019, has picked up in the subsequent months, reaching the same level as it was in 2019, an official data said.
There has been a decrease of about 14% in total freight traffic. While the railway freight between April-July, 2019 was 66.57 million tons, it came down to 57.20 million tons. Of late, the freight traffic is coming back to normalcy after significant dip in April. This is also a positive indication for the economy.
Similarly, traffic handled by key ports like Paradip, Gopalpur and Dhamra, have also been affected. While the Paradip Port handled 38.09 million tons (MT) of cargo between April and July 2019, it came down to 34.64 MT which is minus 9.07%. Similarly, the Dhamra Port also sustained a decline trend in cargo handling. While it was 7.16 MT during the same period of 2019, it registered slightly lower at 7.04 MT.
However, Gopalpur Port has registered a significant growth. While its cargo handling in 2019 (April to July) was 1.19 MT, it increased to 3.38 MT, which is 184.35% more than the previous year. This indicates that return to normalcy will not be delayed if right measures are employed.
The consumption of electricity by industries is a major indicator of the state’s economy. Due to COVID-19 several industries stopped operation in March-April leading to reduced power consumption. Overall electricity consumption by industries during April-July was 1,622 MU against 2,377 MU during the same period in 2019.
This has led to drop in revenue generation of distribution companies. While their revenue was Rs.1546 crore in 2019, it came down to Rs 1061 crore due to pandemic situation. As the state government opened up industries much earlier, the electricity consumption is now increasing since April, 2020.
Looking into different major sectors of the state economy, Odisha has certainly sustained losses, but not in declining mode. Now all the sectors have tightened their belts and are working overtime to return to the track, be it industries, railways, ports and others.
Odisha can easily overcome the crisis faster than many other states as the situation is not as bad as expected. We keep going and have not stopped at any point of time. Now the state has to take big strides, which was possible, said an expert.
Meanwhile, Chief Minister Naveen Patnaik has announced that Rs 3,000 crore of credit will be extended to 1.5 lakh MSME units across the state which will certainly generate more employment. Department of MSME is in constant touch with commercial banks. Presence of Debashis Panda as Secretary Banking is much more helpful for the State. Principal Secretary MSME Satyabrat Sahu is aggressively monitoring credit extension facility.
Once the money flows in the market, situation will look up. The state may not keep its GDP above 10%, but it will not register any negative growth as the nation has sustained.
The State Government meanwhile, opened up the hospitality sector allowing restaurants and bars to operate with guarded precautions against the virus. Once the transport and hospitality sectors become normal, it will boost possibilities in other sectors also.
However, time has come for the state to push money in the market and make the economy sustainable to tide over the situation. People need to be given cash and not just 5 kg of rice and a kilogram of dal for their survival. The state should immediately push cash into fisheries, horticulture, poultry, cash crops other than hand holding of the MSME and Industries.
It is high time that the State Government should release KALIA Funds and credit facilities for Agriculture and allied sector, which has remained dormant now. While credit extension in MSME Sector has jumped up, it has not picked up in Agriculture and allied sector, which has huge scope for employment generation.
And most importantly, there is a need for reducing compliance burden across the sectors in order to attract investors. This will create a favourable environment for investors. There should be less paper work and more digital process.
While Ease of Doing Business (EDOB) is taken up seriously at State level, execution at District level is lacking, which needs to be looked upon. At the State level, role of top mandarins in EDOB is quite praiseworthy; however District Collectors need to be guided for generating an enabling environment for investment.
The slew of investment proposals has brought hope during the pervading despair of the pandemic. The opportunity must be seized by providing a more conducive environment for further investment in the state.