Orissa outpaces national growth rate

The rapid industrialization in Orissa seems to have put the state on a high growth trajectory. The state, otherwise known for high incidents of poverty, has outpaced national growth rate in the first three months of the 11th Five Year Plan (2007-12).

According to the Economic Survey of Orissa for 2010-11, the state has registered an average real annual growth rate of 9.57 per cent compared to national average of 7.79 per cent during this period.

As per quick estimates, the state's real growth rate in 2009-10 at 2004-05 prices stood at 10.57 per cent, up from 7.24 per cent a year earlier.

The Economic Survey has however, called for extra efforts to ensure that Orissa's economy continues to grow at a rate higher than the national average over a long period of time to catch up fast with the rest of India.

The services sector accounted for 53.7 per cent of the state's economy followed by industries at 27.8 per cent and agriculture at 18.4 per cent.

The survey states that the state maintained a relatively strong own tax performance in 2009-10 with a marginal drop in tax-GSDP (Gross State Domestic Product) ratio, but non-tax revenues dropped by about 10 per cent amounting to 0.25 per cent of GSDP.

The total revenue receipts of the state as a ratio of GSDP fell by almost one percentage point from 17.2 per cent in 2008-09 to 16.3 per cent in 2009-10.

Non-tax revenues of the state increased only marginally in 2009-10 over the receipts in 2008-09 in absolute terms and as a ratio of GSDP, there was small reduction of 0.25 percentage points.

Despite a significant increase of almost 50 per cent in mineral concession fees, rents and royalties, the drop was primarily because of no debt relief in 2009-10 compared to Rs 381.90 crore in 2008-09, a reduction of about 31 per cent in interest and dividend receipts and a relatively smaller reduction of about Rs 30 crore in revenue from sales of timber and other forest produce.

Total liabilities as a ratio of GSDP has been brought down from 55.92 per cent at the end of 2002-03 to 23.24 per cent by the end of 2009-10. This has been possible as the state has not resorted to market borrowings since 2006-07. Secondly, fiscal reform and debt write-off mandated by the Finance Commission as a reward for fiscal prudence have also helped to make this happen the broad category of public debt, net outstanding loans from the Government of India have been reduced from 10.5 per cent of GSDP in 2005-06 to a level less than half that figure in 2010-11, as per the budgetary estimates.

Other public debt including market borrowings and institutional debt among others also exhibits a steady fall from 14.5 per cent by the close of 2005-06 to six per cent by the end of 2009-10. However, this is one category of debt that is expected to rise to 7.33 per cent as per the budgetary estimates for 2010-11.