Bhubaneswar: The pandemic has derailed the economic growth engine of Odisha. The State is projected to record its worst ever contraction of Gross State Domestic Product (GSDP) in the last decade.
Odisha’s real GSDP is estimated to contract by around 5 per cent (-4.92%) as per the advance estimates of the financial year 2020-21. Such a grim home-truth has been brought to the fore by the Economic Survey 2021 tabled in State Assembly today.
The immediate fallout of the worst contraction in GSDP is seen on the fall in per capita income of the State. The per capita income declined by over 5 per cent to touch Rs 74,669 – the lowest since 2017-18.
ODISHA VS INDIA
While the Agriculture and Allied sector provided the growth cushion amid pandemic shock in India, Odisha has no such cushion to its aid.
The pandemic has made the Odisha economy bleed all the way. Almost all the sectors in the State had posted a deceleration in growth rate.
When the farm and allied sector in the State posted a sharp dip of 6.54 per cent in the current fiscal year of 2020-21, the industry sector declined by 8.83 per cent and services sector by (-)3.18 per cent.
In contrast, the farm and allied sector in the country grew by 3.4 per cent, whereas the industry and services sector dipped by 9.6 per cent and 8.8 per cent, respectively.
EQUITY FACTOR IN ODISHA ECONOMY
When the agriculture and allied sector in Odisha could contribute only 21.27 per cent to State’s total economy, a massive 60 per cent of the State population depends on the sector for their livelihood.
On the contrary, the Services sector contributes a whopping over 42 per cent to the State’s economy but provides employment to only 25 per cent of the workforce (means who are engaged in any gainful employment).
Significantly, the Economic Survey 2021 has put glare on the importance of services sector in poverty alleviation in any economy. The survey quoted World Bank “Poverty reduction more strongly correlated with growth of services than with growth of manufacturing.”
This mismatch in the structure of economy in Odisha is attributed to poor and inequitable growth in the per capita income of the State, experts observe.
WHY UNEMPLOYMENT HIGH IN ODISHA?
Textiles and wearing apparels (readymade) provide employment to nearly 29 lakh in India, but the jobs the sector churned in Odisha stood at mere 3,849.
The production in the sector, as indicated by gross value added (GVA), contracted in the State to around Rs 4811 lakhs from Rs 5091lakhs in 2015-16. In contrast, the GVA doubled in the country during the period.
The Economic Survey admits the sector’s high potential of job creation. It said, “The Apparel, being a high employment generating sector, is a focus sector of the State.”
OTHER HIGHLIGHTS
- Mining sector contribution to gross state value added down by 0.04 per cent to 8.98 per cent
- The sector provides employment to mere 59,636.
- Employment up over 10K but mining revenue doubles during the period 2015-20.
- MSMEs provide employment to 16.92 lakh in Odisha in 2019-20
- Only 1.63 lakh hobs generated in MSME sector in 2019-20.