Odisha Economic Corridor needs Rs 123 trillion investment: ADB study

The Odisha Economic Corridor would need a total investment of Rs 123 trillion. Transportation and logistics component of the proposed infrastructure development would account for 70n per cent of this total envisaged investment. The balance 30 per cent of the investments are to be sunk into energy and urban sectors, says a study by Asian Development Bank (ADB). The Odisha Economic Corridor is the third and final phase of the country's first coastal economic corridor.

The proposed investments are based on projects that have already been identified by the Odisha government. Many road sector projects are close to procurement and construction. The remaining projects would need to be executed in a phased manner. The high-value items include the coastal highway, Biju Expressway, Ranchi-Vijaywada Road, Talcher-Kharagpur Rail Link, government housing Project in Bhubaneswar, and Dhamra-Bokaro LNG Pipeline. Other key projects include the DFC projects, which are proposed to traverse the corridor. The total investments identified comprise 363 projects, of which 116 have been prioritized.

The study says that a successful Economic Corridor Development (ECD) programme necessitates an institutional and governance framework to coordinate policies and their implementation at the federal, state and local administrative levels. This coordinating framework ensures integrated planning, development, and management of the corridor with requisite physical and industrial infrastructure, urban and social amenities for attracting a skilled workforce and investment promotion and facilitation mechanisms.

The key factors that determine the successful implementation of the economic corridor are investment climate, institutional and governance framework, coordinated industrial and urban development and corridor planning, development & management.

Odisha has a stable investment climate. The state received total foreign direct investment of Rs 630 million with a cumulative inflow of Rs 20.6 billion from April 2000 to December 2016. During the 'Make in Odisha' conclave held in December 2016, the state secured investment intents valued at Rs 2.03 trillion across key sectors such as mines & minerals, IT & electronics, apparels, biotechnology, pharmaceuticals, chemicals & plastics and food processing.

Odisha was ranked 11th with respect to the ability to attract investments as per the findings of a study conducted by the National Council of Applied Economic Research (NCAER) in 2015-16, supported by the Foreign and Commonwealth Office, British High Commission, India. As part of this initiative, NCAER developed a State Investment Potential Index 2016 (N-SIPI 2016), which rates the states on their relative attractiveness in terms of investment through a combination of factor input availability, physical and industrial infrastructure, and regulatory environment, among others. The N-SIPI is built around five pillars- labour, infrastructure, economic climate, governance & political stability and investor perceptions. Odisha performs well in two of the five pillars- labour and political stability & governance. The state's key strengths include competitiveness regarding labour force participation, availability of industrial training institutes with high seating capacity, high ratio of industrial to state GSDP (Gross State Domestic Product), land availability with access to sea ports and low share of economic offences.