Poverty reduction rate in Orissa still very slow: Eco Survey

from the Financial Express

Dilip Bisoi

Bhubaneswar The incidence of poverty in Orissa is still the highest in the country. While 40% of the state's population lives below the poverty line, the poverty reduction rate has been very slow. This grim picture of Orissa’s economy was given out in the Economic Survey for 2007-08 released here last week-end.

According to the survey, rural poverty in the state was one of the highest with a large portion of the Scheduled tribe and caste population in western and southern Orissa still living in a precarious condition, with a very low economic base.

The per capita income of the state, as per the 1993-94 price index, stood at Rs 5,747 against the national average of Rs 11,013. The average monthly per capita consumer expenditure was Rs 399 in rural areas and Rs 757 in urban areas, compared with Rs 558 and Rs 1,052 at the national level, respectively.

The survey identified undiversified economy, low investment and frequent natural calamities as the main reasons for the state's under-developed economy and slow economic growth.

The 22 lakh hectare farmland brought under irrigation by the end of the Tenth Plan, bringing 29% of the net sown areas under assured irrigation, was much lower than Punjab and Haryana. The credit deposit ratio of the state was also quite depressing. The ratio declined from 81.62 % in 2005-06 to 79.51 % in 2006-07. Public sector investment was too inadequate in a poverty-stricken state, resulting in poor economic growth, the survey added.

One of the key human development indicators, the infant mortality rate (IMR), was at 73 per 1,000 live births, which is still higher than the national average of 57. The Survey suggested more stress on the state's health care sector.

Although the state government did make a significant policy shift to encourage private sector investment, the process of industrialisation continues to be slow. This has rendered the economy heavily dependent on the primary agriculture sector, which accounts for 35 % of the gross domestic product (GSDP) of Rs 63,774 crore in 2006-07, as per the advance estimates. In fact, GSDP growth in 2006-07 was at 6.02% over the last year.

However, the survey said there was cyclical growth in the secondary sector, ranging from 23.94% to 12.92% from 2004-05 to 2006-07, the highest being in the year 2004-05. The growth of the tertiary and finance and services sector was also fairly consistent at an average of 11% and 5%, respectively, it said.

To bring in macro-economic stability, the Survey suggested it was time Orissa made an endeavour to increase public savings and raised adequate resources.