No cheerful tale for the State. Odisha is no more a key State in the country’s Foreign Direct Investment (FDI) map. This is when the nation has seen a springtide of FDI in 2014-15 in the wake of ‘Make in India’ launched by Prime Minister Narendra Modi. It is an alarm bell for the State when it is struggling hard to regain its pole position in industrial investments as a RBI report indicates a nip in FDI inflow to the prevailing less enthusiastic economic scenario and tedious business environment in Odisha. The State has received a mere US$ 8.5 million worth FDI only up to January 31, 2015 in the fiscal year 2014-15 — which is mere one-sixth of that it received in 2013-14. Odisha had received the highest FDI in the country in 2009. Ahead of Bihar and Jharkhand since 2009-10, Odisha has fallen behind them in 2014-15. This trickling down assumes significance when the nation has seen over 33 per cent rise in FDI inflows.
The law of diminishing returns seems gaining grip over Odisha as strife-torn Jammu and Kashmir is apparently riding on the Make in India wave by receiving over US$ 4 million so far in 2014-15 from mere US$ 0.23 million in 2013-14. As industry study suggests FDI inflow to India to touch around US$ 48 billion in 2015-16, Odisha has to pull the right strings to remain a key player as metallurgical sector - State’s mainstay - has seen a lesser rate of inflow compared to new-age industries and service sectors. According to RBI data, services (financial and non-financial) bag the highest FDI totalling US$ 41 billion from 2000-2014 followed by development construction (township, hospitals, regional infra built-up and development projects), telecom, software/hardware, drugs and pharma, automobile and chemicals. It has been observed that FDI inflows got traction to those sectors that have a tremendous growth potential or employ high skilled labour force or have high demand that give high returns.
Explaining it, a senior RBI officer delineated the sectors that Odisha can bank upon to boost FDI. He indicated that the State has to establish more software technology parks, satellite towns, smart cities, hospitals, educational institutions, hotels etc. Moreover, in conventional terms, power sector holds high potential for FDI inflow to Odisha. Though Odisha has the potential for automobile industry, lack of efficient manpower has been its biggest shortcoming, he added.
Metallurgical sector (aluminium, steel) doesn’t have the high potential for FDI inflow as it is mostly dominated by public sector, he observed. However, Nalco and SAIl have received significant FDI, he maintained. According to a RBI report, progressive industrial policy laying emphasis on new-age industries like telecom, software/hardware, drugs and pharma, infra construction and services would necessitate a sound economic ecosystem and together with an easy business climate could act like a force multiplier to growth, investment and employment in the State. As an earlier report by Deollite outlined the big fault lines inherent in State’s business climate where the functioning of single window mechanism itself draws much consternation from investors, reflects the need for acclimatising business rules in Odisha with top States like Gujarat, TN, Karnataka, Andhra Pradesh and Maharashtra.