Delving deeper into Orissa’s economic state

World Bank is investing in Orissa citing improved growth prospects, contrary to the key indicators which show that the famous trickle-down will not work here. Obviously, extra-economic factors are at play. Mohan Guruswamy and
Mohan Guruswamy and Maria Mini Jos Delhi 

Often the World Bank’s decision to invest in certain states headed by certain favoured politicians seems to be merely an extension of US policies by other means. The World Bank lead economist and co-team leader, V J Ravishankar, on the eve of announcing aid to Orissa, has ascribed the decision to the improving growth prospects of the state. However, the facts are at variance with this common perception of improved rates of growth and better performance of the agricultural sector.

According to the Central Statistic Organisation (CSO), the per capita income for Orissa at current prices for the year 2003 is Rs 12,388 as opposed to the all India average of Rs 23,359. The poverty rate (in percentage) for Orissa was the highest among all the Indian states and it stood at 47.15 per cent for the year 1999-2000, according to the Planning Commission’s 10th Five-Year Plan (2002-07). The Human Development Report (2001), places the Human Development Index (HDI) ranking for Orissa in an inter-state comparison at 11th for the year 2001 in a survey conducted across 15 states. The agricultural sector which the state government says shows drastic improvements is not in a robust state as the negative 6.8 per cent growth of state-wise Gross State Domestic Product from agriculture for the period (2000-01 to 2001-02 at 1993-94 prices) indicates, as per the CSO. The ministry of agriculture found the state-wise yield of food grains (kg/hectare) showing a decline in the case of Orissa for the 1990-91 to 2000-01 periods at a rate of negative 0.54 per cent as opposed to the all-India average of 1.79 per cent. The State Domestic Product, which, according to official claims, grew at a rate of 8.4 per cent (real growth) actually showed a rate of growth of 4.28 per cent for the

years from 1993-2003 at constant prices (1993-94) against the national

average annual growth rate of 6.20

percent (CSO).

 The share of the agricultural sector in the total work force in 1999-2000 stands at 68.9 per cent and this is way above the figures for the whole of the nation, which was 57.4 per cent (10th Five-Year Plan). These figures, along with the dismal performance of the sector, have contributed to the poor socio-economic condition witnessed in the state. The industrial sector accounts for a mere 9.1 per cent of the total work force and this makes one doubt the creation of trickle-down effects generated by

the increasing levels of investments. The annual growth rate of output for the period from 1993-94 to 2003-04 was 1.75 per cent and this was significantly lower than the average for the country

as a whole which stood at 6.19 per

cent (CSO).

The Registrar General of India places the social indicators such as literacy rates for the year 2001 at 63.08 per cent in Orissa. This leaves the state worse off than the average for India as a whole (65.20 per cent). When employment trends are compared, the state fares almost at par with the country average with the daily unemployment rates for 1999-2000 being in the range of 7.1 per cent for rural Orissa and 9.5 per cent for urban Orissa in relation to the national averages of 7.2 per cent and 7.7 per cent respectively (source: Employment and Unemployment in India, 1999-2000, Key Results, National Sample Survey Organisation, Ministry of Statistics and Programme Implementation).