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Odisha, known for its ‘memorandum of understanding (MoU) model of development’, is veering to a reform-powered growth path, with focus on speedy approvals, to tap emerging sectors.
With the average time for a project approval in Odisha narrowing to 19.5 days and the state boasting of the highest conversion rate from investment intents to firm proposals, the stage is set to script a new growth story that goes beyond the favoured metals and mining space.
Experts deliberating at the Business Standard Odisha Round Table were unanimous about overcoming negative perception and branding the state in a positive light.
Sanjeev Chopra, principal secretary-industries said, “Odisha is a victim of perception. More often than not, people tend to speak of Odisha in a negative light. That’s very unfortunate. A report by Assocham ranks Odisha among the top three states in attracting live manufacturing investments and the number one in implementation rate (of projects). This has not happened through a stroke of luck but on the back of reforms and systems put in place.”
Chopra junked the MoU model of attracting investments, clarifying that the emphasis was more on timely approval to projects. “We, at the industries department, have not signed any MoU in the last three years. There is no need to sign any MoU. An MoU has no legal backing. We invite investors to come to us and we will give an approval within 30 days,” he said.
Between 2002 and 2010-11, Odisha signed 92 MoUs. Forty-six of these have translated into production, which is the highest conversion rate in the country among MoU-signed projects, Chopra claimed.
Arun Mishra, managing director at Tata Steel SEZ Ltd and vice-president (project Gopalpur), said with its industrial ecosystem and as an education hub, Odisha was branching out to other sectors. “We have the knowledge and skills to help us to diversify into other sectors, which we did not dare to in the past. This government has come out with many initiatives that have taken care of people who are not into gainful employment pursuits and this gives solace to industry. If industry is burdened with social initiatives, then it becomes a drag.”
The state government has listed six new focus sectors in its Industrial Policy Resolution-2015. These are electronics manufacturing; tourism; ancillary & downstream industries in metals and chemicals; plastics & petrochemicals; food processing, including sea food; and textiles & apparel. In these six, Odisha aims to garner Rs 2.5 trillion of fresh investments by 2020.
L N Gupta, additional chief secretary-MSME, said Odisha has huge potential in food processing, especially sea food. “We are the ninth largest fish producer. Exports worth Rs 3,000 crore (Rs 30 billion) are likely to happen this year in the marine sector.”
Gupta dwelt on the calibrated efforts taken up to change the landscape of entrepreneurship and build a start-up ecosystem in Odisha. “152 start-ups have been registered without the start-up portal, of which 10 per cent are helmed by women. We are providing Rs 20,000 every month to registered start-ups and marketing & development allowance of up to Rs 15 lakh. We also have a learning & development programme developed by Upgrad, which has seen around 3,000 registrations. We have an informal partnership with Facebook to provide digital marketing skills to micro entrepreneurs.”
Opportunities also exist in steel downstream space, said R K Sharma, principal secretary (steel & mines). “I believe the number of downstream industries in steel would go up. We will ensure that there is no scarcity of raw materials as we will be able to bring many more mines for auctions. The government will also endeavour for seamless transition for mining leases due to expire in 2020. Odisha has been leading reforms in the mining sector and we believe the sector can drive the state’s GDP (gross domestic product),” Sharma added.
Vinod Nowal, deputy managing director at JSW Steel, said the company was hopeful of starting work on its 12-million-tonne steel project in Odisha in the next fiscal year. “We have applied for all clearances. Apart from steel, we may also go for some allied products and value addition.”
Nowal sounded confident of Odisha’s promise of being an industry friendly state. “My experience with the bureaucracy (in Odisha) is very high. The officials are very proactive. Politically too, there is not much interference.”