Odisha's reforms perk up investors, but implementation woes hang on

Resource-rich Odisha has slipped four places in the latest 'Ease of Doing Business' ratings. From a consoling seventh rank in 2015, it has tanked to the 11th slot- worrying enough for an investor to do a rethink on his investment goals for the state.

Investor interest in Odisha has not eroded, though. A suite of reforms to ease business has helped the state to improve its score from 53 to 92, and also, apparently retain the momentum for investments.

While the new pronouncements on policies and reforms have rejuvenated the investment landscape, investors visibly fret over implementation on the ground.

"Odisha still ranks as one of the leaders in 'Ease of Doing Business' with its multi-dimensional industry-friendly policies. However, there is always scope for improvement of ground execution of the policies. The intent of the executive and bureaucracy has to be translated across the cadres for ensuring sustainable improvement and change", said Manish Kharbanda, executive director and group head (mines & minerals), Jindal Steel & Power Ltd (JSPL).

JSPL is one of the major investors in Odisha with a string of projects- an integrated steel plant, the largest pelletisation plant, a proposed downstream steel park and an ambitious coal-to-liquid plant- a project scrapped later after the company lost its allocated coal block.

JSPL is among the metal focused companies that made a beeline to Odisha in the early 2000s. The state's mineral bounty drew the investors in metals, mining and power sector in droves. Slowly, the investor interest fizzled out as the state found it hard to keep to its promise of land allotment and grant of mineral leases. The epic pull out came with ArcelorMittal's withdrawal from its 12 million tonne steel mill in 2013, after troubled by delays in land acquisition and obtaining a mineral concession. Two years later, Posco (the country's biggest FDI) shocked Odisha when it announced to temporarily freeze its $12 billion steel project in the state.

And, with the introduction of mineral auctions killing discretionary allotments, Odisha realised it was time to reboot its strategies. A new Industrial Policy Resolution (IPR), 2015 was unveiled where the focus clearly shifted from resource-based growth to emerging areas- sectors that were less capital intensive but promised more jobs.

What followed was a string of roadshows to draw investors. The state government topped them with new policy pronouncements designed to lure investors in the new sectors- IT & electronics, food processing, tourism, MSME (micro, small & medium enterprises) and green energy to name a few. The polices would be showcased to investors at the 'Make in Odisha' conclave to run from November 30 to December 2.

Industry captains believe the changed strategy can prove to be a game-changer for Odisha.

Chandrajit Banerjee, director general, CII said, "A few days ago, the state government announced policies for as many as eight sectors - MSME, renewable energy, handloom, apparel, biotechnology, tourism, food processing, and pharmaceuticals. We are confident that these policies will prove to be clinchers in investment decisions."

Indeed, Odisha has more to explore beyond minerals, feels C P Gurnani, chief executive officer and managing director of Tech Mahindra. "Odisha is the most unexplored state. Other than steel and minerals, Odisha has not been marketed properly and projected well. The state has got immense potential, talent, beauty and, more importantly, quality of the manpower. There is a need for us to project Odisha a lot better for tourism, services industry , manufacturing and many different sectors also", says Gurnani who is also the chairman of National Association of Software & Services Companies (Nasscom).

But, policies on paper would also have to be matched by an investment ecosystem on the ground. There is a host of key business reforms where Odisha is yet to catch up with its peer states. Odisha still does not figure in the league of top five states when it comes to the land allotment or availability of land, says the website of Department of Industrial Policy & Promotion (DIPP). There are other parameters- Single Window, labour regulation, environmental registration enablers and online tax return filing where Odisha needs to improve to take on the higher ranked states.

Omkar Rai, director general , Software Technology Parks of India said, "Odisha has got availability of land and favourable polices for the electronics industry. The investment depends on many parameters... it depends on the entire ecosystem."

CII which is working closely with the Odisha government to find easier ways to start and do business has hailed the state's increasing investment commitments on infrastructure.

A recent report by Assocham has placed Odisha on the top in grabbing the highest share in manufacturing investments by the country. Also, Odisha chosen as one of the three states to host the 'Make in India' conclave has seemingly enthused the investor community.