Odisha quite high on ‘Ease of Doing Business’

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Odisha quite high on ‘Ease of Doing Business’

Thursday, 15 November 2018 | BISWARAJ PATNAIK

Narendra Modi is becoming less popular than he was at the beginning for talking too much. When his own generals and lieutenants revealed that the BJP had purposefully made tall promises by resorting to believable bluffs, particularly  the ‘black money scooping’ from foreign holes and distributing 15 lakh rupees to every Indian, all Indians felt deceived. The latest surveys indicate a big downfall for the ruling party unless miracles happen. The vulgar display of power of money by some of the younger BJP leaders had caused the most unexpected defeat of the Vajpayee regime. The ‘India Shining’ campaign was just a plain mad technique they used to cause suicidal outcomes despite historic nation-building efforts and successes. The present Modi-Shah duo is causing great national distress by defacing and recreating heritage and history and branding every non-BJP State nonperformer. It is forecast that Rajasthan and Chhattisgarh and more are going to be lost like a needle in a haystack for the saffron party. Modi is singularly popular only because he appears persuasive to the gullible communities. But overall, Modi has no steam left to keep the saffron flag fluttering across the nation. Shah causes pain and ache among the sensible masses for his crude approach to every electioneering initiative.

Interestingly, Naveen Patnaik is a perfect antithesis of Modi. His popularity is on the rise, and magically so. He keeps cool and quiet, no matter how bitter, noisy or caustic the critics are. The Make in Odisha Conclave causes considerable excitement among the corporates looking for business opportunities. The 2018 ‘Make in Odisha’ Conclave has done too well. A whopping Rs 4.20 lakh crore investment has been promised by leading corporates to generate employment for nearly five hundred thousand young people. Potential  investors have shown up because they feel extremely safe and reassured due to a robustly stable regime making available a truly investor-friendly environment with extremely supportive policies for ease of running business. An Asian Development Bank study says no other State of a India can match with the affordable labour cost in Odisha, where people lead a content, happy life. They do not feel exploited despite being fully aware of the higher labour charges in the other similarly-developed States.

‘Ease of doing business' might be the buzzword for attracting investors as States scramble to improve their rankings. But Odisha is quietly stealing the show with its competitive advantage in the cost of doing business. An Asian Development Bank study has rated Odisha as the most cost-competitive State judged by the criteria of cost of setting up and running a business. The report has dwelt on key parameters — wage rate of skilled labour, industrial power tariff and land costs. In all the selected parameters, Odisha wins it hands down on cost compared with States like Andhra Pradesh, Maharashtra, Gujarat, Tamil Nadu and West Bengal. The study establishes that Odisha has the lowest wage rate of skilled labour among the surveyed industrialised States. “A low wage rate is a positive factor for the setting up of businesses from the perspective of industry since it drastically reduces the operating expenditure of any business,” the study says. The wage rate of skilled labour in Odisha is Rs 6,240 per month whereas for Maharashtra it is Rs 8,739 and West Bengal Rs 8,888. Andhra Pradesh with a wage rate of Rs 9,818, boasts of the highest cost of labour. The other two industrially leading states, Gujarat and Tamil Nadu, have wage rates of 9,414 and 9,115 rupees, respectively. Power-surplus Odisha also boasts of the lowest industrial power tariff amongst the six chosen States at Rs 4.20 per unit. In Maharashtra, it is Rs 7.20 and West Bengal Rs 6.60.

Cost of land is another key area where Odisha trumps Gujarat and Maharashtra. Land cost in key industrial locations of Odisha remains between three and six million rupees per acre. Compared with this, Gujarat’s land rate at its industrial locations of Vadodara, Surat and Bharoch is more than double — eight to ten million rupees per acre. In Maharashtra, the cost is even higher as land rates hover between eight and 16 million rupees.

Using Odisha’s cost in labour, tariff and power, the ADB study goes on to say that an industry in the casting and forging sector can generate billion dollars in revenue and save half a million dollars in power costs if it chooses Odisha over Andhra Pradesh. The savings for the industry are twice at Rs 52.2 million if Odisha is preferred. over Maharashtra. For an apparel maker in Odisha, the savings in power costs could range between 3.5 million and 10.6 million rupees over other States. A report by industry body Assocham says by the end of March 31, 2017, Odisha had attracted live investments worth 13.2 trillion rupees, the third highest in the country with a share of 7.2 per cent. Odisha has the fastest implementation rate of projects as projects valued at 6.4 trillion rupees are in various stages of implementation.

Odisha has positioned itself as an investment hub after staging road shows in Mumbai and Bengaluru, eventually culminating in the first-of-its-kind summit ‘Make in Odisha’ in 2016. From the three events, the State bagged 124 investment intents, 76 of which have already translated into firm commitments. The State Government has identified six focus sectors, which include agriculture and food processing, chemicals and petrochemicals, textiles, downstream and ancillary, ESDM-IT and ITeS and auto and auto components.

As per Vision 2025 of CM Naveen Patnaik, his Government is working with an aim of attracting  two and a half lakh crore rupees of fresh investments and generate three million jobs. Odisha offers several advantages to investors such as rich mineral reserves, strategic coastal location with over 10,000 km of highway network; and the State is part of the East Coast Economic Corridor. The Government has set up a single-window portal in the country for speedier facilitation and tracking of investment proposals and approvals. It has identified dedicated sector-specific clusters and estates with 10,000 acres of developed industrial land. It also has over 300 'ready to invest' projects across key sectors. Odisha has established four Investment Regions in the focus sectors, viz., National Investment & Manufacturing Zone (NIMZ)at Kalinganagar, Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) at Paradip, Port Based Manufacturing Zone at Dhamra and Information Technology Investment Region at Bhubaneswar. This will transform Odisha into the industrial gateway to eastern India.

To attract investors, the Government is offering specific incentives that include 100 per cent exemption from stamp duty on loan agreements, credit deeds, mortgages and hypothecation deeds executed by the industrial units in favour of banks. It is also offering capital grant to support quality infrastructure, wherein 50 per cent of the infrastructure cost with a ceiling of Rs 10 crore per greenfield industrial park and capital subsidy of 10 per cent up to maximum as indicated based on employment and investment in auto and auto components, agro and food processing, textile among others.

Over the last three years, the State Government has embarked upon the implementation of a Business Reforms Programme to make it easier for companies to set up and operate in the State, following which Odisha has been recognised as a ‘Leader’ in terms of implementation of business reforms with 92.73 per cent score in the ‘Ease of Doing Business Report of 2016’. The Associated Chambers of Commerce and Industry of India (Assocham) has ranked Odisha as the ‘number one State’ in terms of investment implementation rate.

Detractors, opponents and political adversaries keep screaming that Odisha has dipped on the scale of ‘ease of doing business’ from where it was two years ago. What they do not appreciate is the fact that the points of merit remain the same. Some other States have added a few numericals on some parameter or the other. But Odisha shall continue to attract the most investors for, apart from the highlights placed, it has mother nature on its side with its unique bounty which will hold the State supremely high on the enticement scale, and incomparably so.

(The writer is a core member of Transparency International, Odisha)

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