With Foreign Direct Investment (FDI) to Odisha hitting a nadir in 2014-15 since the year 2000-01, a pickup looks evident in the second quarter of the financial year 2015-16 as the State recorded FDI inflow to the tune of Rs7 crore per month.
However, it is still far below its earlier average of over Rs24 crore per month recorded for the two consecutive years of 2012-13 and 2013-14 and
nearly Rs10 crore per month during the period of 2000-01 to 2011-12.
When the first quarter (April - June) of 2015-16 could see a mere Rs3 crore or US $0.4million FDI inflow to the State, the numbers took a swift turn in the second quarter (July - September) by recording a FDI inflow to the tune of Rs23 crore or US$3.6million. With ‘Make in India’ fervour, Odisha could this fiscal see a reverse sweep of the 2014-15 jinx- when it saw FDI inflow of mere Rs56 crore or US$ 9 mn.
In this context, the State Government’s push to non-mineral sector during Chief Minister’s recent confabulation with top world business leaders at the Make in India Week in Mumbai would act as a force multiplier to the FDI inflow to State in coming days, feel policy watchers at RBI here.
According to senior RBI research officer who didn’t want to be quoted, Odisha could see a springtide in FDI inflow following two significant developments in recent months. As currently infrastructure and township development along with power sector garner around 13 per cent of FDI inflow to the country, the emergence of Bhubaneswar as the smartest city in India has brightened the prospects for the State. Moreover, it coming among top movers in eastern region in the Cleanest City survey coupled with State’s overall tag of ‘aspiring leader’ in the Ease of doing Business survey poised Odisha for a giant leap in netting more FDI inflow in clean energy/power, provided the State urgently carries out necessary structural reforms to sail with the FDI tide - especially when the Centre has liberalised FDI limits in such sectors under its Make in India initiative.
Unlike mineral industries where land acquisition and raw material linkage proved stumbling block in State’s industrial drive Part - I, time-bound service delivery to investors, quality infrastructure and skilled workforce — the basic requirements of new age industries — could prove challenging for the State’s industrial drive Part - II.
And, Odisha should undertake structural reforms to surmount the challenges, indicated observers -given that the new Industrial Policy Resolution (IPR) is silent on such reforms but was more eloquent on fiscal incentives. Observers emphasized the need of better connectivity for Part - II industrial drive of the State.
For instance, Odisha holds high promise for automobile industries by virtue of having raw materials but the equal raw material the industry requires is skilled work force, where the State is lacking in comparatively to Chennai, Mumbai, NCR, Gujarat and Karnataka.