Odisha fourth from bottom among low-growth States

September 9, 2017 at 6:44 pm sanjibkarmee Leave a comment

Here is a reality check for Odisha when the State Government is aggressively on the path of image makeover as the State was tugged up along with 15 other States as a low-growth one by the country’s planning watchdog Niti Aayog in its latest report ‘Ease of Doing Business: An Enterprise Survey of Indian States’ released last month.

Significantly, the new classification of high- and low-growth States in the country by the Niti Ayog is based on the computation of a median annual Gross State Domestic Product (GSDP) from annual real GDP growth rates of the States for the period 2004-05 to 2013-14, whereby the States that experienced equal to or above the median rate are tagged as high-growth ones and those fell below as low-growth States.

Odisha in this Niti parameter could record an average year-on-year growth rate of only 6.59 per cent for the period 2004-05 to 2013-14 and, hence, fared poorer than States like Bihar, which with a year-on-year growth rate of 9.45 per cent prettily grouped among the high-growth States. The story doesn’t end there. Even among the 16 low-growth States, Odisha’s average year-on-year growth rate is only higher than three States, Assam, Jammu & Kashmir and Manipur.

More shockers the report delivered are: In Odisha, not even 32 per cent enterprises have availed the benefit of the State’s much-touted Single Window System owing to poor implementation on the ground. Also, only 22 per cent enterprises in the State have any knowledge about their environment category and, thereby, the State finished second from bottom. Moreover, in access to finance by enterprises in Odisha, the State’s entrepreneurs did speak of greater amount of obstacle in access to institutional finance.

In the important indicator of dealing with legal issues, enterprises in Odisha speak of facing legal disputes unlike States like Bihar, Meghalaya, Nagaland and Uttarakhand where none of the enterprises have reported of facing any legal disputes, reveals the Niti Ayaog report.

While the Odisha Government has pulled up its socks to come as the number one business-friendly State, the Niti Ayog report pricks the reality prevailing notwithstanding averments. Odisha didn’t figure in the top -3 in the vital indicator of time taken for getting approvals across all areas of doing business. An entrepreneur can start his business in just little over two months in Tamil Nadu and Andhra Pradesh. Odisha fared the poorest by taking 95 long days to provide electricity connection to an upcoming enterprise when Karnataka takes only 31 days.

Moreover, when Odisha claims itself as a power-surplus State, it didn’t figure in top -3 States led by West Bengal and Delhi where enterprises faced the least power shortages of 11-13 hours in a month.

Odisha rated as low-growth State. (From the Hindu)

More hurdles in setting up new businesses vis-a-vis other States: NITI Aayog

Despite the government claiming to have provided business-friendly environment to investors and attracting huge investments in past decade-and-a-half, Odisha has been categorised as a low-growth State in the country in the latest NITI Aayog survey.

High growth States

The NITI Aayog’s ‘Ease of Doing Business Report: An Enterprise Survey of Indian States’, released on Monday, points at more hurdles in setting up new businesses in Odisha compared to other States. The 15-high growth States include Bihar, Uttarakhand, Tripura, Sikkim and Meghalaya.

The NITI Aayog and IDFC Institute, its knowledge partner, have classified States on the basis of their average annual real growth rate using State Gross Domestic Product from 2004-05 to 2013-14.

Median average

“We calculated the median average annual growth rate, which turns out to be 8.14%. The States that experienced annual average growth rate equal to or above the median were classified as high-growth States and those with annual growth rate below the median were categorised as low-growth States,” the study stated. At a growth rate of 6.59%, Odisha falls in low-growth category.

According to the study, enterprises in high-growth States reported fewer regulatory hurdles. This establishes an empirical link between superior regulatory environment and better economic performances.

Power connection

“On average, enterprises reported taking 52 days, 61 days, and 76 days for getting electricity, water, and sewerage connections respectively. The World Bank 2017 Doing Business report ranks India at number 25 for getting electricity connection and it is estimated that getting the connection takes about 46 days. It takes an average of 31 days to get electricity connection in Karnataka, 32 days in Gujarat and around 95 days in Odisha,” says the report.

Odisha is listed among States with lowest proportion of enterprises having knowledge of their environment category. Only 22% of enterprises in Odisha are aware of their category.

Similarly, the age distribution of high-growth and low-growth enterprises shows that in general, the share of young enterprises is higher in the high-growth States than in the low-growth States.

Around 20% of enterprises in Odisha are young whereas percentage of young enterprises in Bihar is above 70%.

Entry filed under: Athmallik, Balangir, Bargarh, Boudh, Deogarh, Jharsuguda, Kalahandi, Nuapada, Region watch, Sambalpur, State Watch-Monitoring the Odisha State, Subarnapur, Sundergarh.

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