Here is a warning for the State Government. For the first time in its stint of over 17 long years, Odisha has recorded the least-ever industrial investment inflow during the 12th Five-Year Plan period that ended on March 31, 2017. The State has recorded an inflow of private investments worth only Rs 1.909 lakh crore during the period of 2012-17.
This comes as a shocker for CM Naveen Patnaik, who has emphasised on fast-paced industrialisation to address State’s myriad ills. Even, the BJD manifesto has been gung-ho about it.
According to the latest available data, Odisha received investment commitments worth over Rs 2.02lakh crore in 10th Plan period (2002-07). However, post Posco deal, the buzz built around largest ever FDI to India reaped a windfall and in 11th Plan (2007-12) Odisha recorded a record investment commitments worth a whopping Rs 11.86lakh crore, which incidentally was country’s highest investment commitment, even dwarfing progressive States like Gujarat, Maharashtra, Andhra Pradesh and Karnataka.
The significant reminder here, however, is Odisha did see the most violent protests against fast-paced industrialisation efforts by the State Government during the 11th Plan only. And the beginning year of 12th Plan period felt the pinch, when year 2012 saw investment commitments plummeting by whopping 80 per cent. Though investments somewhat picked up in 2013, the year preceding 2014 general elections, the momentum kept losing steam in 2014, 2015 and 2016 against the backdrop of lingering Vedanta imbroglio, pullouts by big names like Mittals and Posco.
Odisha has received the lowest ever industrial investment commitments in 2016 when the total commitments made stood at mere Rs 22,507crore from a high of Rs 3.2lakh crore in 2012. The State in the fiscal year 2016-17 has received commitments totalling Rs 24,035crore, up by mere 1.7 per cent over 2015-16. A significant mention here is the State had launched an overdrive in 2016-17 with ‘Make in Odisha’ conclaves across important industrial hubs in the country.
However, the consolation fact for the State is even with reduced number, Odisha could manage to stay put in top-5 in the country in the 12th Plan, which, however, is the lowest ever rank in the last three Plan periods (10th -12th).
The biggest reason seen behind the plunge in big numbers for Odisha in 12th Plan is decline in investments from metallurgical sector, which has been a capital intensive industry and also been Odisha’s mainstay industry.
However, a look at the investment commitments made into Odisha in 2016-17 reveals some encouraging gestures. A whopping 46 per cent of new commitments made were from the diversified sectors ranging from gems, renewable energy, biomass energy, hotels, food processing, distilleries, dairy and tyres. Since these industries are not capital intensive, they don’t make the big headline numbers.
This is a blessing in disguise for State. Metallurgical industries are capital intensive but have long gestation period, which often proves a bane.
Investment commitments received last year have smaller gestation period and benefits to people would be immediate, explained a senior Industry Department official.