Orissa shining: State lifts 3 mn out of poverty

from the Business Standard

Orissa has lifted around 3 million people out of poverty and has made the strongest fiscal turnaround among all states six years between 2000 and 2006. Over 45 per cent of Orissa's population is, however, still living below poverty line.

Stating this, a forthcoming World Bank study on Orissa whose main findings were released today, lauded the efforts of the state government to achieve its goal to bring down the poverty level to below 10 per cent by 2020.

The study "Orissa in Transition: From Fiscal Turnaround to Rapid and Inclusive Growth" was conducted by the World Bank in 2007.

The study found that the poverty headcount ratio for the state, after rising during 1993-99, declined during 2000-2005 by more than 8 percentage points in rural Orissa and 2.5 percentage points in urban Orissa.

This is better than the all-India average decline of 5 percentage points for urban India and 2 percentage points for rural India.

Among the factors that helped the turnaround, the study highlights adoption of a consultative approach to fiscal correction and a strong government resolve to accelerate projects in the face of a resource crunch.

"What is most heartening about Orissa's economic transition is that growth has been most rapid in the southern region, which was one of the poorest parts of India. This turnaround carries important lessons for the rest of India as it seeks to ensure inclusive growth for all," says VJ Ravishankar, lead economist and principal author of the study.

Significantly, over the past seven years, the state's primary fiscal balance has been converted from a deficit of 5.9 per cent of gross state domestic product (GSDP) to a surplus of 2.8 per cent, a correction of 8.7 percentage points. However, according to the study, if the state can consolidate the gains of its fiscal turnaround and devote more public resources to development, it may be able to address these challenges effectively. To ensure inclusive growth, the study further suggests that the state government should unleash the potential of agriculture, fishery and forestry, on which most of the poor people depend.

The study also highlights the need for meeting the huge infrastructure gap, which is hindering growth. The state has $125-billion portfolio of 470 ongoing investment projects that are projected to generate an additional GSDP (gross state domestic product) of $35 billion. This is twice the size of Orissa's GSDP of 2006. This level of investments suggests that Orissa may experience a period of even more rapid growth in the future, the study says.