In an increasingly globalised economy, the service sector has emerged as a major source of employment along with industry and manufacturing. It is evident worldwide that with growing technological application, modern agriculture sector has absorbed very less manpower in comparison to the other two sectors. The continued backwardness of Odisha with extreme poverty and distress migration can be minimised with expansion of its much promising service sector which has not been explored in spite of many possibilities and natural advantages.
The State Government must encourage adequate investment from all possible sources of both private and public to meet the challenges. In recent years the service sector has contributed more share in State gross domestic product though it is a good sign but it is not growing visibly in comparison to other States.
The sub sectors in service sector include trade, repairing, hospitality industry, tourism, banking, transport and communication etc. The labour force survey data shows that about one-fourth of the workers of the State are engaged in service sector and enough possibilities are there to employ more with its adequate expansion. It is reported that trade and repair is the third largest employer after construction and agriculture. Odisha has huge surplus Labour in agriculture which need to be shifted into service and industry sector but in the current situation the service sector can employ more. The challenges of land acquisition, environment and displacement are relatively less in service sector compared to mining and industry.
Let’s see the two vital areas of service sector such as tourism ad banking which are quite relevant to the economic development of Odisha. Tourism is one of the most promising areas of economy of the State due to many existing natural features.
The long coast line, beaches, forest, wild life sanctuaries , mountains, caves, rivers, lake, lagoons, dams and reservoirs, historical monuments, heritage and specially Buddhist monuments and temples in the State are unexplored sources of major modern economic activities. The Government must learn from States such as Rajasthan and Kerala those have attracted huge number of domestic and international tourists and have made tourism as its major source of economic activities. Odisha can be developed into a Buddhist pilgrimages centre to attract people from China, Korea, Japan, and people from many other countries interested in Buddhism and its heritage.
The Government must plan to develop these places with adequate connectivity and hospitality infrastructure of international standard to meet the emerging need of the tourists. Connectivity and communication are primary need to promote of tourism.
The poor connectivity network and communication links are major reasons of the underdevelopment. The airport, railway line, bus routes and river waterways need to be connected to all parts of the State especially to areas of economic activities. Along with this, health and sanitation and law and order, social environment issues must be addressed with equal importance for the overall protection of domestic and international visitors. The other important areas of service sector are finance and insurance amenities where the State has not yet reached to all its citizens to ensure a better service.
Financial inclusion has been viewed as important means to enhance economic growth and counter income inequality by increasing access of the poor to formal financial services. This has been getting momentum with initiative of G20 countries, including China and India, since 1999 as finance sector reform agenda to counter global economic crisis.
There are areas where there is no connectivity and financial services specially the people in interior parts and mostly from marginalised section have no access to financial inclusion. There are 18 public sector banks and as many private sector banks, besides a cooperative banks network in the State but still the number of branches has not covered a vast majority of rural population who are being deprived of banking facilities in their areas. Usually they have to travel a substantial distance to access banking services. Many of them are deprived of benefits of various Government schemes and entitlements.
The State has nearly 7,000 panchayats but only close to 6,000 bank branches. The finance and insurance service has a huge scope of employment as well as access to financial inclusion. By providing banking coverage to one and all, the economy can be provided a major boost.
These days digital connectivity has become essential for banking activities .There is a growing need of internet and broadband connections to make people empower with communication and information. It is being suggested by many that financial inclusion is very relevant to States like Odisha having a vast majority of poor and illiterate poor who mostly depend on casual labour and informal sector employment. In order to fight poverty, access to institutional financial service is very important which can play a critical role in generating employment and income at micro level. It will also contribute in arresting the exploitative private money lending which is rampant in the State.
The poor people largely depend on traditional sources to manage their finance with all risk and vulnerability. Money lending has been a major problem in rural and tribal areas of Odisha which has been very much exploitative with higher rate of interest and in this process people get dispossessed from their productive assets such as land. In Odisha there is a law to prevent money lending in tribal area but this problem still continues in the absence of institutional finance service.Most of the small and marginal farmers and landless sharecroppers are compelled to take loan from private money lenders to meet the agricultural activities and other needs and during harvesting seasons, they pay it back with very higher rate of interest. The PMJDY has given emphasis to open branches in hilly, tribal and difficult areas which the State Government should give priority.
Added to the financial literacy, rural connectivity and power supply have been a major issue in opening braches. The State Government along with other international and national agencies and private companies should help the banks in expanding new branches in interior parts of the State by building basic infrastructure and other required facilities and at the same time, promote financial literacy among the masses.
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