It is an eye-opener for Odisha. Private investors are no more seemingly betting big on the State. The trend looks overwhelming when Odisha in the first four months (January – April) of this year has slipped to number eight nationally from fourth in 2014 in getting private corporate investments.
This has been State’s worst performance in past nine years. Significantly, Odisha had been at the helm in private investment commitments made nationally till the year 2013. The biggest obvious fall-out of this slip-up down the ladder would be on employment generation in the State.
It is so because proposals itself has shrunk from a high of 179 amounting to investments worth Rs 3.15 lakh crore in 2010 to mere 27 with investments to the tune of Rs 28, 219 crore in 2014 and a handful of eight proposals worth Rs 2,388 crore in first four months period of 2015. How acute the effect on employment could be ascertained from the fact that in the year 2013-14 the State saw actual realisation of a mere four proposals that provided employment to a measly 1,018 persons. Data further reveals that in the financial year 2014-15 the State saw implementation of mere two proposals that created jobs for around 4,600 – 4,800 persons only. It needs mentioning that both the implemented proposals – Utkal Alumina’s 15 lMT plant at Rayagada and 10.5 MW steam and power generation plant by Emami Paper mills at Baleswar – worth Rs 7,594 crore in 2014-15 were proposed in year 2006 and 2013.
An analysis of the investment proposals filed in Odisha reveals that over 85 per cent are from metallurgical sector with iron and steel taking the lion’s share. Majority failed to see the light of the day primarily due to a spurt in cost of production in the last 5-6 years, said a senior delegate of Indian Steel Association, which recently met Chief Secretary GC Pati recently.
He observed that a project in metallurgical sector would commence production, if conditions remain normal, in a span of 3-4 years. But in Odisha, such projects commence production after 6-long years and even many industrial undertakings have put their plans in abeyance owing to uncertain economic activity in the State, he remarked. It needs mentioning that projects in the metallurgical sector see a good implementation rate in States like Andhra Pradesh, Gujarat and Maharashtra. Incidentally, mining scam- hit States like Goa and Karnataka record a poor implementation rate.
The latest data with the Ministry, however, discloses that fertilisers, chemicals (including paints and emulsions), electrical equipment, electronics, food processing and textiles have received the most investment intentions in the fiscal year 2014-15. Odisha, however, has not even 5 per cent of its investment proposals in the said sectors. The draft Industrial Policy Resolution 2015 has even failed to propose any tax incentives or booster dose for emerging industries like chemicals, electrical equipment and fertilsers. The benefit for the State would be, as data shows, implementation rate for projects in such sectors would be around 1-3 years and job creation to be around 2-3 times that of metallurgical sector.