Odisha is known for rich mineral deposits like iron ore, coal, etc, but neighbouring States are well ahead in setting up maximum number of value-added units, mainly in steel sector, in comparison to Odisha, owing to less industry -friendly policies of the Government of Odisha. This was evident from the statistics provided by Rourkela Chamber of Commerce and Industry, in a recent letter to Chief Minister Naveen Patnaik.
The letter also hinted that there has been an exodus of many units from the State to Chhatishgarh in last one year or so, particularly due to low electricity cost offered by other neighboring States in comparison to prevailing electricity rates at Odisha.
The RCCI in its letter to the Chief Minister also warned that the situation is further likely to be ugly after imposition of GST. “We fear that cheaper steel from neighboring States would easily be flooded in Odisha market, since there would be no entry tax, after introduction of GST,” mentioned president of RCCI Sunil Kayal.
“Despite rich deposits of minerals like iron ore, coal and other allied requirement for a secondary steel units like rolling mill and induction furnaces, neighbouring States like Chhatishgarh and West Bengal have been able to attract large numbers of secondary steel producers as compared to Odisha and thereby created large scale of employment opportunities for their people,” Kayal mentioned in his letter.
Chattishgarh alone has a whopping 250 secondary steel units, most of these units located in Odisha border, West Bengal with about 125 secondary steel units against only about 35 units in Odisha, the letter said. Significantly, majority of the raw materials these units of neighbouring States are getting is from Odisha, the letter added.
The scenario in the State is turning bad to worse with the units located in Sundagarh district struggling for survival, mainly due to low electricity cost. “In a unit like rolling mill and induction furnaces, electricity is considered as one of the major raw materials since about 850 units are consumed in an induction furnace to produce one ton of steel and therefore the a small difference in electricity tariff poses a threat for the survival of the unit,” said a furnace owner requesting anonymity.
“The electricity tariff in the Odisha is as high as Rs5.80 per unit, in comparison to Rs3.90 to Rs4.10 in Jindal Industrial Park, Raigarh of Chhatishgarh and Rs4.85 for secondary steel producers in entire Chhatishgarh and Rs4.80 in Damodar Vally Corporation of West Bengal,” he said.
Due to the price disadvantages in electricity, at least three units from Sundargarh district have shifted to Jindal park in recent past and some other units are mulling to shift to Chhatisgarh, where as the rest are in shutdown stage, he added.
Significantly, experts in industry argue that Chhatishgarh in respect of attracting the secondary steel producers has scored a point over Odisha, particularly when Odisha should have been natural destination for these units. With these units under its fold, Chhatishgarh has been a major beneficiary in respect of higher amount VAT collection, RTO tax, holding tax etc., besides creating an employment opportunity for about two lakh families, in secondary steel sector alone, sources said. Besides, due to high volume of steel transportation, Chhatishgarh has emerged as a major logistic hub, due to which many leading logistic companies of the country have created their set ups in Chhatishgarh,” sources added.