ORISSA November 2010 ORISSA November 2010 Investment climate of a state is determined by a mix of factors • Skilled and cost-effective labour • Procedures for entry and exit of firms • Labour market flexibility • Industrial regulation, labour regulation, other • Labour relations government regulations • Availability of raw materials and natural • Certainty about rules and regulations resources • Security, law and order situation Regulatory framework Resources/Inputs Investment climate of a state Incentives to industry Physical and social infrastructure • Condition of physical infrastructure such as • Tax incentives and exemptions power, water, roads, etc. • Investment subsidies and other incentives • Information infrastructure such as telecom, IT, • Availability of finance at cost-effective terms etc. • Incentives for foreign direct investment (FDI) • Social infrastructure such as educational and • Profitability of the industry medical facilities 2 ORISSA November 2010 Contents Advantage Orissa State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Orissa 3 ADVANTAGE ORISSA Orissa November 2010 Orissa – State profile • Located in the Eastern region of India, Orissa has a population of 36.7 million (Census 2001). • The coastal state has an area of 155,707 sq km and accounts for 4.9 per cent of the total land area in India. • Orissa shares borders with Madhya Pradesh and Chhattisgarh to the West, Bihar and Jharkhand to the North, West Bengal to the Northeast, Andhra Pradesh to the South, and the Bay of Bengal to the East. • Orissa‟s administrative capital is Bhubaneswar. The state has 30 administrative districts. • Cuttack, Rourkela, Berhampur, Baleshwar and Puri are the other large cities in terms of population, after Bhubaneswar. • Orissa has three major seasons, summer (March to June), monsoon (July to September) and winter (October to February). • Languages spoken in the state are Oriya and its various dialects, Hindi and English. Source: Maps of India 4 ADVANTAGE ORISSA Orissa November 2010 Advantage Orissa … (1/2) Hub for mineral-based industries Orissa has emerged as a key state with regards mineral- and metal-based industry. The state leads in iron, steel, ferroalloy and aluminium production. It also has a strong base for coal-based power generation. Policy and fiscal incentives The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Policy Resolution, 2007. Additionally, the state has sector-specific policies for IT, and the micro, small and medium enterprises (MSME). Rich labour pool The state has a large base of skilled labour, making it an ideal destination for mineral-based industry. Further, the state has a large pool of semi-skilled and unskilled labour. Source: Maps of India 5 ADVANTAGE ORISSA Orissa November 2010 Advantage Orissa … (2/2) Facilitating infrastructure Orissa has well-developed social, physical and industrial infrastructure, and virtual connectivity. In addition, the state has an airport and prominent port infrastructure. High economic growth Orissa is targeting 9 per cent annual economic growth during the Eleventh Five-Year Plan period (2007-2012). Much of this growth is expected to come from the secondary sector (manufacturing), which is anticipated to grow at a rate of 6 to 10 per cent. Stable political environment The state has a stable political environment. Apart from other facilitating agencies the State Government has constituted the „Team Orissa‟ to help in investment promotion. Source: Maps of India 6 ADVANTAGE ORISSA Orissa November 2010 Orissa in figures … (1/2) Parameter Orissa All-states Source Economy GSDP as a percentage of all states‟ GSDP 3.0 100.0 CMIE, as of 2007-08, current prices Average GSDP growth rate* (%) 15.5 11.8 CMIE, 2000-01 to 2007-08, current prices Per capita GSDP (US$) 748.5 992.5 CMIE, as of 2007-08, current prices Physical infrastructure Central Electricity Authority, Installed power capacity (MW) 4,059.3 159,398.5 as of March 2010 Cellular Operators Association of India, as GSM cellular subscribers (No) 13,467,378 456,586,162 of June 2010 Broadband subscribers (No) 48,350 4,981,976 As of October 2008 Ministry of Road Transport & Highways, National highway length (km) 3,704 70,548 Annual Report 2008-09 Major and minor ports (No) 1+2 12+187 Indian Ports Association Airports (No) 1 133 Airport Authority of India Social indicators Literacy rate (%) 63.1 64.6 Census of India, 2001 Ministry of Health & Family Welfare, RHS Birth rate (per 1,000 population) 21.4 22.8 Bulletin, March 2008 *Calculated in Indian rupee terms 7 ADVANTAGE ORISSA Orissa November 2010 Orissa in figures … (2/2) Parameter Orissa All-states Source Investment Department of Industrial Policy & Promotion, FDI inflows (US$ billion) 0.3 120.2 April 2000 to May 2010 Outstanding investments (US$ 203.9 1,972.6 CMIE, as of March 2010 billion) Industrial infrastructure PPP projects (No) 20 515 www.pppindiadatabase.com SEZs (No) 5 363 Notified as of July 2010, www.sezindia.nic.in PPP: public private partnership, SEZ: special economic zone Parameter Orissa Government Policy support Sector-specific policies Industrial, IT, tourism and PPP Availability of labour Ample skilled and unskilled labour available 8 ADVANTAGE ORISSA Orissa November 2010 Key industries with policy thrust and factor advantages Industry attractiveness matrix High Energy including Power Medium Policy thrustPolicy Low Medium High Factor advantage *Factor advantages include benefits due to geographical location and availability of factors such as talent pool, natural resources and capital 9 ORISSA November 2010 Contents Advantage Orissa State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Orissa 10 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 Socio-economic snapshot of Orissa Parameters Orissa Capital Bhubaneswar Geographical area (sq km) 155,707 Administrative districts (No) 30 Population density (persons per sq km) 236 Total population (million) 36.7 Male population (million) 18.6 Female population (million) 18.1 Population growth rate 1991-2001 (%) 16.3 Sex ratio (females per 1,000 males) 972 Literacy rate (per cent) 63.1 Male (%) 75.4 Female (%) 50.5 Average life expectancy (years) Male 60.3 Female 62.3 Sources: Census 2001, Economic Survey of Orissa, 2009-2010 11 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 Orissa‟s GSDP • At current prices, the total Gross State Orissa‟s GSDP Domestic Product (GSDP) of Orissa was (US$ billion) about US$ 31.8 billion in 2009-2010. 2009-10 31.8 2008-09 29.0 • The average GSDP growth rate between 2007-08 29.6 1999-2000 and 2009-2010 was about 13.2 per 2006-07 22.6 2005-06 cent. 17.4 2004-05 15.9 CAGR 2003-04 14.0 13.2% • The metals and mining sector has contributed 2002-03 10.9 2001-02 9.7 to the significant growth of Orissa‟s GSDP. The 2000-01 9.0 state has attracted significant investment in the 1999-00 9.2 steel and aluminium industries. 0.0 10.0 20.0 30.0 40.0 Source: CMIE 12 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 Orissa‟s NSDP • The total Net State Domestic Product Orissa‟s NSDP (NSDP) of Orissa was about US$ 28.0 billion (US$ billion) in 2009-2010. 2009-10 28.0 2008-09 25.6 • The average NSDP growth rate between 2007-08 26.2 1999-2000 and 2009-2010, was about 13.0 2006-07 19.8 per cent. 2005-06 15.1 2004-05 13.9 2003-04 12.3 CAGR 13.0% 2002-03 9.6 2001-02 8.5 2000-01 7.9 1999-00 8.2 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Source: CMIE 13 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 The tertiary sector has the largest share in Orissa‟s economy • In 2009-2010, the tertiary sector contributed Percentage distribution of GSDP the most to the GSDP at 46.9 per cent (US$ 14.9 billion). It was followed by the primary 100% CAGR sector, contributing 30.4 per cent (US$ 9.7 80% 44.4 billion) and the secondary sector, contributing 46.9 14.0% 22.7 per cent (US$ 7.2 billion). 60% 20.3 14.7% 40% 22.7 • At 14.7 per cent, the secondary sector 20% recorded the highest growth rate of all three 30.4 35.3 11.7% sectors in the period 1999-2000 and 2009- 0% 2010. It was followed by the tertiary sector, 2009-10 1999-00 which grew at 14.0 per cent and the primary sector, which grew at 11.7 per cent during Primary sector Secondary sector Tertiary sector this period. Source: CMIE 14 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 Per capita GSDP • Orissa‟s per capita GSDP in 2009-2010 was US$ 786.6. • Per capita GSDP has increased at a CAGR of 11.9 per cent between 1999-2000 and 2009-2010. • The per capita GSDP is relatively higher in the district of Khurda, which is home to the capital, Bhubaneswar, than in the rest of the state. Per capita GSDP (US$) 900.0 786.6 800.0 748.5 725.7 700.0 600.0 578.6 450.1 500.0 368.1 413.7 400.0 255.2 245.1 262.7 290.7 300.0 200.0 100.0 0.0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Source: CMIE 15 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Orissa November 2010 Consumer expenditure on household goods and services • Orissa is ahead compared to all-India in share of per capita expenditure on food and durable goods.