ASSIGNMENT-2

The Macro-economic behaviour of Odisha

[Document title]

SUBMITTED BY:
Somya Ranjan Nanda
21206072
KIIT

SUBMITTED TO:
Prof. Damodar Jena
The economy of Odisha is one of the fastest growing economies in India. The
economy of Odisha has grown at 7.1 percent per annum during the period 201213
to 2019- 20 (at constant 2011-12 basic prices) and expected to contract by 4.92
percent in 2020-21 as per the Advance Estimates. The decline in the growth rate
between 2019-20 and 2020-21 (Advance Estimate) is attributed to the impact of
Covid-19.

The Gross State Domestic Product (GSDP) of Odisha in 2021-22 (at current
prices) is projected to be Rs 5,86,000 crore. This is equivalent to a 6% annual
growth over the GSDP in 2019-20 (Rs 5,21,275 crore). In 2020-21, Odisha's
GSDP (at current prices) is estimated to contract by 2.2% over the previous year.

GDP of Odisha
Expenditure

Total expenditure for 2021-22 is estimated to be Rs 1,70,000 crore, an annual

increase of 17% over the actual expenditure in 2019-20.

Capital expenditure for 2021-22 is proposed to be Rs 50,433 crore, which is an

annual increase of 39% over the actual expenditure in 2019-20. Capital
expenditure includes expenditure affecting the assets and liabilities of the state,
such as: (i) capital outlay, i.e., expenditure which leads to creation of assets (such
as bridges and hospitals), and (ii) repayment and grant of loans by the state
government.

Fiscal deficit for 2021-22 is estimated to be Rs 20,465 crore (3.5% of GSDP). In

2020-21, fiscal deficit has decreased by 1% from the budget to the revised stage.

Revenue expenditure for 2021-22 is proposed to be Rs 1,19,567 crore, an annual

increase of 10% over 2019-20. This expenditure includes the payment of
salaries, pensions, and interest. In 2020-21, revenue expenditure is estimated to
be 9% less than the budget estimate.
Economy of Odisha exhibited rapid strides in growth trajectory in last two
decades. The annual average growth rate of the state economy during 2012-13 to
2019-20 was 7.1% as against the National average of 6.6%. In line with the
scenario at National and global level, the economy of Odisha also suffered
setbacks due to Century Crisis of COVID-19 pandemic resulting in negative
growth rate in 2020-21 as per advance estimate.

The GSDP of the state is expected to contract by 4.92% in 2020-21(AE) against

an estimated contraction level of 7.7% at National level during the same period.
However, growth rate of GSDP in 2019- 20 (RE) is estimated at 5.21 %. The
agriculture sector of the state contracted by 6.54% percent as against a positive
growth rate of 3.38% percent at National level during 2020-21. Similarly, GSDP
of Industry sector and Services sector of Odisha contracted by 8.83% and 3.18 %
in comparison to 9.57% and 8.77% contraction at National level during the same
period.

Prioritising life to livelihood, the Stringent stipulations imposed by the state

government to contain the spread of covid-19 in earlier phases had a greater
impact on Rabi crops and flood in some parts of the state, long dry spells in
panicle initiation stage and pest attack on Kharif Paddy are the reasons for
negative growth rate of agriculture sector of Odisha in comparison to India.

However overall economic base of the state has emerged stronger which resulted
in a significantly less contraction of the overall state economy in comparison to
National scenario. With a stable governance system along with suitable and
timely government interventions the situation will mitigate and the state will take
the path of development in post pandemic period. Per-capita income of Odisha in
2020-21 is expected to reach INR 1,02,156 from INR 1,04,566 in 2019-20

As per advance estimate of 2020-21, per-capita income of Odisha at current

priced is expected to decline by 2.30 % in comparison to 2019-20. However,
during the same period, the per capita income at national level is estimated as INR
126968 registering a decline of 5.41% over 2019-20. The converging trend
between per capita income of Odisha and India which has just started since some
years is also pronounced in the Covid hit year of 2020-21.