Orissa scripts sustained turnaround, says World Bank

This is the reason why, the Bank is now favorably inclined to help out Navin Patnaik, the state chief minister, with some big financial assistances, be it in the infrastructure sector or for eradication of poverty.

Observing that though the coastal state—having a population of some 32 million and spread over some 155,000 sq km—still had a long way to go to match developmental status of Karnataka and Maharashtra, officials said the gap is narrowing down fast. ‘‘The state is now on the path of sustained growth. Development prospects are indeed looking great. It has had a significant turnaround,’’ the official told The Indian Express.

Referring to developmental statistics, the official said it shows real growth has picked up and grown much above the all-India average. ‘‘Through the 1990s they were far below the all-India average. The general trend is very positive,’’ he said.

After stagnating in the 1990s, economic growth has accelerated in recent years, including faster growth in mining, agriculture and service sectors. ‘‘Real growth reached an average of 8.4% over the past years; ahead of all-India average, and nearly double growth rate of the 1990s,’’ the Bank said in a statement this past week.

‘‘The high agricultural growth rate is welcome as it continues to provide employment to over 80% of all workers in the state,’’ said V.J. Ravishankar, World Bank Lead Economist and Co-Team Leader. ‘‘Measures to improve productivity and economic returns from agriculture are at the heart of this operation and will have far-reaching impact for the rural poor,’’ he said in the bank statement.

With the series of investor-friendly measures in lines with the bank policy being taken by the Navin Patnaik Government in the past couple of years, officials said in last 12 months Orissa has risen to No. 1 state in the terms of investment projects. ‘‘This is the first step towards attracting major projects in the state,’’ the official said.

Though it is well possible that many projects might not see the light of the day, the fact that major companies like Posco and Mittal Steel are actually setting up their mega plants in the state reflects the confidence in the state government, officials point out.

‘‘Mineral industry is going to be an important part of the growth story,’’ said the bank official, who has been keeping a tab on the development in the state, adding that the Patnaik Government has taken a number of serious steps in this regard including a comprehensive resettlement and rehabilitation policy developed in assistance with UNDP.

With the state showing signs of turnaround, officials said: ‘‘Fiscal situation of Orissa has shown a remarkable improvement. Just three years ago they were in an extremely tight situation. Last two years they did not have even a single day of overdraft. There is now more fiscal space for undertaking development.’’

Observing that the state government has managed its finances well, the bank official said it has abolished some 15,000 regular positions in the last two years. It is one of the few states that has passed an anti-corruption legislation.

To fuel sustained growth, the Bank is now looking at funding two major projects in the state beginning next year – development of state highway and major district roads and another project for poverty alleviation. ‘‘These two projects would be of around $300 million,’’ the official said.