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Economy To Grow By 7.8%

Bhubaneswar: Despite global economic slowdown and recession, Odisha’s economy is estimated to grow by 7.8 per cent in real terms during the current financial year 2022-23 against 7 per cent growth at All India level.

According to the Odisha Economics Survey Report for the year 2022-23, Odisha is one of the fastest growing states in India. In 2022-23, Odisha’s economy is expected to grow at 7.8 per cent which is higher than pre-COVID average growth of 7.1 per cent (2012-13 to 2019-20) in real terms.

Comparatively, India is expected to grow at 7.0 growth in real terms in 2022-23. Odisha is expected to grow at a rate higher than All-India average growth. The industry and service sectors have been the major engines of economic growth in the State.

In 2021-22, the state’s GSDP grew by 11.5 per cent while India grew by 290 basis points lower than Odisha. Odisha’s growth resilience is reflected in its average medium-term growth rate of 7.9 per cent from 2013-14 to 2021-22, leaving aside the Covid year.

In nominal terms (growth in current price), Odisha grew by a rate of 23.5 per cent against 19.5 per cent at all India level in 2021-22, it said.

State’s economy recovered from Covid-19 induced economic shocks in 2022-23. But, due to Russia-Ukraine war led disruption in global supply chains and upward movement in energy and other commodity prices, the inflation 2022-23 has gone up. In Odisha, the average inflation till December 2022 was 6.56 per cent higher than 3.7 per cent in 2021-22.

Agriculture and allied sectors constitute nearly 22.5 per cent of Gross Value Added (GSVA) (2022-23 AE). The sector employs more than 40 per cent of the workforce, thus being the biggest employment generating sector in Odisha. This sector is expected to grow at 5.9 per cent in 2022-23 as against 3.5 per cent at all-India level.

High growth in agriculture and allied areas is important for balanced growth of the economy and ensures that benefits of growth are shared widely. Due to proactive measures of the Government of Odisha, the agriculture and allied sector grew at nearly double the rate than of all-India at 6.3 per cent in real terms in 2020-21.

Similarly, the industry sector, which has been the key growth driver in the State, has recorded the highest growth on average in the pre-covid times (7 per cent). In 2022-23, the industry sector is expected to grow at 6.1 per cent, as per the Report.

The mining sector constitutes more than 10 per cent of GSVA. Therefore, any movement in mining activity impacts not just the mining sector but also the manufacturing sector and other sectors through backward and forward linkages, it said.

The third major sector, the Services sector, is expected to grow at 8.8 per cent in 2022-23, higher than pre-COVID average growth. The sector constitutes nearly 36 per cent of GSVA in 2022-23.

Similarly, the per capita income of Odisha has multiplied by thrice between 2011-12 and 2022-23 while at all India level, it is multiplied by 2.7 times. Odisha’s per capita income grew at an annual compound rate of 10.9 per cent while that of India grew by 150 basis points lower than Odisha during this period, the report said.

The present (2022-23 annual estimation) per capita income in the State is Rs 150,676 in current prices as against the all-India average per capita income of Rs 170,620 (current prices). However, within 7 years, the state has successively reduced the gap between Odisha’s per capita income and per capita income at the national level from 31.6 per cent in 2015-16 to 12 per cent in 2022-23.

The State has been under revenue surplus continuously for the last 17 years since the enactment of Fiscal Responsibility and Budget Management Act (FRBM). The total outstanding liabilities as percentage of GSDP stood at 15.6 per cent in 2022-23, it said.

Odisha is among six highest spending states in the country. In 2020-21, the total public expenditure (revenue expenditure plus capital outlay) of the State was 21.3 per cent of GDP.

The State has also invested heavily in building capacity for growth. The State is one among the two highest spenders on capacity creation as proxied by capital outlay as a percentage of GSDP. In 2020-21, the State spent 3.4 per cent of GSDP under capital outlay.

Against the backdrop of the prolonged COVID crisis, the Sri Lankan catastrophe, the Russia-Ukraine war, and the worsened fiscal positions of many governments around the world, the Government of Odisha has prudently managed the State’s finances to have a very comfortable fiscal position.

“The State economy is poised to grow at 8 per cent to 8.5 per cent in real terms in 2023-24 by harnessing human, natural, and financial resources and strengthening the productive base of the economy,” said the survey report.

Having more than 35 per cent of the country’s natural resources and huge reserves of iron ore, bauxite, coal, etc. and other natural resources, with a skilled workforce, the State would continue to grow at a faster rate, it added.