BHUBANESWAR, July 4: Despite its vast natural resources and substantial development in the last 47 years, Orissa continues to be one of the less developed states in the country. The state economic survey report (1997-98) laments that the development efforts in the state have remained largely stifled since the state has been trapped in the vicious cycle of poverty.The report, however, hopes that large scale private participation in the process of development would greatly accelerate growth and reduce poverty.
The report states while the gross state domestic product (GSDP) increased from Rs 3708 crore in 1980-81 to Rs 6419 crore in 1996-97 at 1980-81 prices registering an annual compound growth rate of 3.49 per cent, the net state domestic product (NSDP), commonly known as the state income, increased from Rs 3443 crore in 1980-81 to Rs 5586 crore in 1996-97, with an annual compound growth rate of 3.07 per cent.
Though the NSDP at 1980-81 prices increased by 28.58 per cent between 1990-91 and 1996-97, theper capita income increased only by 15.33 per cent during the same period due to population growth. Another matter of concern is the wide difference between the per capita income at the state and the national level, the report observers.
To bring the per capita income of the state to the national level, the annual growth rate of NSDP has to be enhanced to 9.58 per cent. Since the scope for mobilisation of the state resources is limited, the desired level of investment can be achieved only if substantial resources are mobilised outside the state's economy. The report states that Orissa's vast natural resources and a supportive industrial policy has created an environment conducive for private sector investment, and the state is already a favoured destination for investments in steel, power and aluminium.
About Rs 1,00,000 crore worth of investment has been lined up by the state since the liberalisation of the economy. However, the initiatives already taken need to be pursued further. The government shouldalso involve the private sector in infrastructure projects and deploy its resources for the development of the social sector, the report suggests.
In Orissa, the share of the primary sector in NSDP continues to be the highest though it has declined from 55.33 per cent in 1980-81 to 36.74 per cent during 1996-97. On the other hand, the contribution of secondary and tertiary sectors has increased from 15.45 per cent to 21.32 per cent and 29.22 per cent to 41.04 per cent respectively during the same period.
Thus, the sectoral analysis reveals that there has been a marginal shift from primary to secondary sector and a substantial shift to the tertiary sector, which generally happens in a developing economy, the report observes.Since agriculture is the dominant sector of the state's economy with a 23.55 per cent share in NSDP and provides employment to 63.75 per cent of the total workforce, agricultural development is of critical importance for the development of the state.
In view of this, the stategovernment formulated an "Agriculture Policy 1996" to double foodgrain and oilseed production within a specified timeframe.
Foodgrain productivity in the state was 1244 kg/ha as against the national average of 1533 kg/ha. The use of fertiliser was 22.7 kg per hectare as against national average of 75.7 kg per hectare in 1994-95. The percentage of net area irrigated to net area sown in the state was 30.5 in 1991-92 as against national percentage of 34.5.
The state government has drawn an ambitious plan to cover at least 50 per cent of the total cultivable land under irrigation by the end of the Ninth Plan. Stating that banking operations in the state have to be developed, the report points out that the credit-deposit ratio is far below the national average and that of several advanced states. The population covered per bank rate at one bank for every 16,100 is also low compared to the all-India level of one bank for every 14,800.
Expressing concern over the unemployment situation, the report suggeststhat it deserves specific attention from the state government. The estimated amount of unemployed at the end of 1997-98 is around 8.12 lakh and utilisation of such a huge idle manpower mostly through non-farm activities will deserve high priority. Investment decisions may have to be taken keeping in view the employment potentiality, the report says. It suggests that the education system be reoriented to check educated unemployment.
Pointing out that there has been a growing emphasis on mobilisation of additional resources and effectiveness of public expenditure with liberalisation of the economy, the report states that the proportion of revenue deficit to GSDP increased from 0.3 per cent in 1986-87 to 3.4 per cent in 1995-96 and fiscal deficit declined from 6.7 per cent to 6.3 per cent during the period. The deficit indicates an increasing gap between the revenue receipt and expenditure.
The report observes "sustaining high growth of output and employment in an environment of macro stability requires ahigh rate of domestic savings, supplemented by adequate utilisation of resources from outside the states. This requires significant and sustained production in revenue and fiscal deficit of the government.
To reduce the debt burden, selective disinvestment in public enterprises may have to pursued. While savings have to be increased and deficit reduced through analogous measures to raise the state's tax and non-tax revenues. Steps have to be taken to curb such non-plan and low priority expenditure and enhance the financial efficiency of public enterprises."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
