Naveen Patnaik inherited a State with a gloomy economy, dangerous debt levels, irresponsible spending history, high interest burden, sluggish growth, high unemployment and widespread poverty. While India grew at the rate of 6 per cent, Odisha struggled with a 4.8 per cent growth rate in the decade prior to 2000. In 2001, for every Rs 100 produced in Odisha, Rs 50.73 was debt burden. More than 40 per cent of tax payers’ money was being used to pay interest on borrowings, leaving little scope for development expenditure. More than 50 per cent of the population was poverty stricken and unemployment was at high levels.
Years of macro mismanagement had caused the revenue deficit to deteriorate from 1.62 per cent of GSDP in 1980-81 to -0.14 per cent of GSDP in 1990-91. It had reached an all-time low of -5.47 per cent in 2001-02. However, after Naveenbabu took over in 2001-02, strategic steps were taken in line with the FRBM which turned around this precarious situation and reached a positive all-time high revenue surplus of 3.2 per cent in 2007-08.
Since long, along with revenue deficit, Odisha also had a fiscal deficit. The fiscal situation had worsened since 1980. It presented a whopping figure of -8 per cent in 1999-2000. This situation was overturned by critical macro planning and professional handling of the economy under the vigilant care of Naveenbabu and the State saw a reduction in the fiscal deficit level. It was in 2006-07 that Odisha became fiscal surplus for the first time in two decades and reached a high of 1.02 per cent the next year!
In 20 years, from 1980 to 2000, Odisha’s GDP overall only grew by 93 per cent while after the advent of Naveenbabu, the GDP grew at an astounding 155 per cent.
The State had run into large debts since 1980 and reached a peak of 50.73 per cent of GDP around 2001-02 but within 10-12 years, this debt burden was brought down to a meagre 13.97 per cent. Today, Odisha leads the way across India in debt servicing (10 per cent) especially when compared to so- called “well developed States” like Gujarat (23 per cent), Maharashtra (24 per cent) and Karnataka (14 per cent).
Within seven years of governance of Naveen Patnaik, Odisha attained a balanced budget and ensued macro stability. Post-Independence, the State had never crossed a decadal CAGR of 4.8 per cent until the last decade where it grew at almost 8 per cent.
Globally, eradication of poverty, in all its forms, remains one of the greatest challenges facing humanity even today. Sustainable Development Goal (SDG)-1 ensures ending poverty in all its forms by 2030. It is to be noted that Naveen Patnaik always sought a development of inclusivity and equality.
The rate of poverty reduction in Odisha was very slow since 1970s till 90s. From 66 per cent poverty in 1973 it dropped to only 48 per cent in 1993 and further to 46.4 per cent in 2004 as per NSS estimates.
However, within six years (2004-2011), poverty rates decreased from 57.2 per cent to 32 per cent as per the Tendulkar Committee Report.
About 81 lakh people were lifted out of poverty in just six years time. During the time, Odisha registered fastest reduction in poverty rate in the entire eastern region of the country.
Even in terms of employment during the same period, Odisha emerged as an outlier in the eastern region. Odisha is the only State in the eastern region to reduce rural unemployment rate by more than 50 per cent while in all other States, the rural unemployment rate increased.
Reduction in the urban unemployment rate was also the highest in Odisha. While all others in the eastern region reduced urban unemployment rate by less than 30 per cent and Chhattisgarh saw an increase in the urban unemployment rate, Odisha reduced it by 73 per cent.
Indeed, the Government’s accomplishments on reviving growth, rapidly reducing interest burden, increasing employment and ensuring macro stability are incredibly impressive. I am not sure whether there would be another such story in India, which showcases such a remarkable turnaround of the macro economy in a short span of time.
(The writer is Baleswar BJD MP)