Economic development in Orissa: Growth without inclusion?

Abstract

The economy of Orissa has been lagging behind the national economy by several decades. Its per capita net state domestic product, a measure of average income, stood at Rs.20200 for 2006-07 which falls behind the national average by about 35 per cent. Moreover, the gross domestic product of the state grew by a considerable lower rate than many other states for a long time despite its high growth potential. Drawing on the experience of several countries as well as that of India, various studies concluded that economic growth was the most critical factor for reduction of incidence of poverty in the state. It now seems that there has been a turning point in the last few years and the economy of Orissa has witnessed an acceleration in terms of the gross state domestic product (GSDP). The evidence presented here clearly shows that the economy is poised for a take-off to a high growth phase, almost similar to that at the national level. On the poverty dimension, however, the recent developments have been gloomy, to say the least. The consumption expenditure surveys carried out by the National Sample Survey Organisation (NSSO), the standard source of data for poverty analysis in India by official and non-official investigators, shows that the period 1993-2004 has witnessed a reversal of the achievements made on the poverty front during 1983-93. The prima facie evidence points towards a case of growth without inclusion and needs further probe.