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Higher unemployment rate dims Odisha's 8.4% growth halo

Despite the bright spots, Odisha's unemployment rate trumping the all India average points to the structural anomalies

Jayajit Dash  |  Bhubaneswar 

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An unemployment rate of 7.1 per cent in 2017-18 in Odisha, beating the national average of 6.1 per cent took the gloss off the state's high growth trajectory.

The Econom for 201ic Survey8-19 illustrates Odisha’s Gross State Domestic Product (GSDP) grew by a robust 8.4 per cent last fiscal as per advance estimates, bettering 7.4 per cent logged in 2017-18. The high growth rate was powered largely by industries sector whose share has been consistently rising in the past four years and expected to contribute 39.47 per cent to the Gross State Value Added (GSVA) in 2018-19. The manufacturing growth exhibited a double digit growth for the fourth year in succession and is tipped to have grown by 15.8 per cent in last fiscal. Services, another key component of the state’s economy, was the largest contributor to the state’s GSVA estimated at 41.6 per cent. Agriculture’s share is projected at 18.9 per cent to GSVA. The state’s agricultural output which had contracted by 8.2 per cent in FY18 due to drought, bounced back in last fiscal and as per advance estimates, it grew by 8.3 per cent.

On a five-year average, Odisha has outpaced other states- Haryana, Punjab, Kerala, Chhattisgarh, Madhya Pradesh, Maharashtra and Jharkhand in GDP growth. Only Gujarat, Karnataka, Andhra Pradesh and Telangana have surged ahead of Odisha.

Despite the bright spots, Odisha’s unemployment rate trumping the all India average points to the structural anomalies. The state for long has been a story of glaring lopsided growth. In Odisha, majority of the workers are absorbed in the agriculture sector. Unemployment rate is more pronounced in urban areas (8.4 per cent) of the state compared to rural areas (6.9 per cent). In term of broad unemployment status, the survey says majority of workers are self-employed (57.4 per cent) followed by casual labourers (27.2 per cent). But recent trends point to increasing formalisation of employment in Odisha marked by rising share of salaried workforce and dip in the count of casual workers. Also, the state government’s initiatives like Make in Odisha conclaves to draw private investments and the State Employment Mission’s placement linked training programme are aimed at boosting employment opportunities.

As per the Economic Survey report, Odisha has made rapid strides in growth of per capita income (PCI). At the end of 2018-19, the state’s PCI stood at Rs 75,796 up from Rs 70,799 in FY18. The state’s PCI has grown by Rs 28,000 during the last seven years, at a pace of 6.6 per cent CAGR (compounded annual growth rate), bettering the national trend of 6.1 per cent.

Odisha displayed fiscal rectitude despite a flurry of populist schemes, limiting its fiscal deficit to 2.9 per cent of GSDP in FY19, advance estimates of the survey showed and thus, conforming to the prescription of three per cent mandated by the Fiscal Responsibility & Budget Management (FRBM) Act. The state continued its revenue surplus trend seen since 2005-06, the surplus at 2.2 per cent of GSDP in last financial year. Revenue receipts have more than doubled in the last six years on tax buoyancy.

First Published: Fri, June 28 2019. 14:42 IST
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