INDIAN STATE : ORISSA

General Information

Orissa is located between the parallels of 17°49'N and 22°34'N latitudes and meridians of 81°27'E and 87°29'E longitudes. Orissa is located on India's east coast. It is bounded by the Bay of Bengal on the east and by the states of West Bengal on the northeast, Bihar on the north, and Andhra Pradesh on the south. The state is rich in mineral resources such as coal, iron-ore and bauxite and is poised to emerge as the metals, mining, and a manufacturing hub of the country. Bhubaneshwar is the capital of Orissa.Cuttack, Rourkela, Berhampur, Baleshwar and Puri are the other important cities of the state. Orissa is an investor's choice owing to its vast natural resources, peace loving and qualified people and well developed infrastructure.

Fact File

Advantage Orissa

• Orissa is a resource rich state. The state is endowed with minerals such as iron ore, coal, chromite, manganese, bauxite, etc.
  
• Adequate water resources
  
• Comfortable power situation
  
• Major sea port
  
• Wide road and rail Network
  
• Conducive agro-climatic conditions
  
• Skilled manpower
  
• Competitive labour costs
  
• Responsive state administration
  
• Rich biodiversity with flora and fauna, marine life forms
  
• Rich forest wealth and medicinal herbs

Economic Infrastructure

Power

Present power scenario

Power Generating Capacity of the State

Hydro Power: 1918.875 MW
Thermal Power: 880.00 MW
CPPs Sources: 1663.148 MW
Total: 4462.023 MW

Administrative control of power sector in Orissa is under

• Orissa Electricity Regulatory Commission (OERC) which is a quasijudisial independent body, ensures transparent regulatory regime in the power sector of the State.

The Energy Department has three Public Sector Undertakings

• Grid Corporation of Orissa Limited (GRIDCO),
• Orissa Hydro Power Corporation Limited (OHPC)
• Orissa Power Generation Corporation Limited (OPGC)

Rail and Road Network

The state provides a good rail and road network and links to various strategic points with more than 2364 kms of rail route and 55,000 kms of roadways.

Sea Port

• Paradeep Port One of the major ports of India is Paradeep Port. This port is also the main outlet and inlet of the sea borne trade not only of the state of Orissa but the entire eastern region as well. This port is specialized in handling bulk-cargo and also handles containerized cargo.
• Gopalpur Port This port has been developed as fair weather port by the state government and is well connected with rail and road.
• Other ports Number of small ports are also there, they are
  • Dhamara port (this port is developed by TATA & L&T)
    
  • Chandbali port
    
  • Chudamani port
    
  • Kharanasi port

Airport

Biju Patnaik International Airport at Bhubaneswar has been declared by the Government of India as Customs Airport for the unloading of imported goods and loading of export goods. The Airport also has an Air Cargo Complex with customs clearance facilities and bounded warehouse. Bhubaneshwar is well connected to Delhi, Kolkata, Mumbai, Chennai, Hyderabad and Bangalore.

Inland Container Depot (ICD)

It has been established at Balasore to provide the intending exporters a terminal facility to complete their documentation formalities and give 'ready to sail' container for export.

Agriculture Export Zone (AEZ)

The Government of Orissa has signed an MoU with the Agricultural and Processed Foods Export Development Authority (APEDA) for setting up an Agriculture Export Zone (AEZ) for turmeric and ginger in the tribal - dominated Kandhamal and Koraput districts. The AEZ will promote exports of organic ginger and turmeric produced in the contiguous areas of Kandhamal and Koraput.

Special Economic Zones (SEZ)

In the Foreign Trade Policy, Special Economic Zone (SEZ) is particularly a delineated duty free enclave to upscale production, augment export and generate employment.

Considering the potential available in the state, Government of India, in principle have already approved for setting up of 13 numbers of sector specific SEZs in Orissa under alumina & aluminium, IT, metallurgical based engineering & ancillary down stream industries, textiles and garments and steel etc. in private sector participation. These SEZs will open a new chapter in the export performance of the state by providing the required atmosphere for attracting national and international investments to Orissa.

Social Infrastructure

Education

Orissa is progressing in the field of education and is getting popular as a hub of engineering, management and medical education in central & eastern India. The state already has large number of highly ranked schools like NIT Rourkela and XIM Bhubaneswar etc. It has 9 Universities, 88 Engg./MCA colleges, 18 Medical colleges.

Apart from this new Institutes coming up are IIT Bhubaneswar, NISER, IIT Kharagpur Campus at Bhubaneswar and BIT. Also Vedanta group to establish a world-class technical university with an annual intake of 100,000 students in 95 disciplines.

Major Industries

Agriculture

Agriculture is the prominent sector in Orissa's economy. In Orissa 65% work force derives employment from agriculture.

Land use pattern in the state:

Thrust areas targeted by the government in agriculture sector

• Dry land agriculture on watershed basis
  
• Production of commercial crops - cotton, sugarcane, potato
  
• Agricultural Intensification with water management in irrigation command
  
• Quality seed production through seed village approach
  
• Small farm mechanization & agro service center
  
• Creation of farmer's market (Kissan mandi)
  
• Information Technology in Agriculture
  
• Infrastructure development (Agro-processing, Cold storage, Seed processing etc.)

Special Schemes for agriculture sector

A number of special schemes both internally and externally aided are operating in the state. Some of the important schemes aided by Govt.of India are

• Integrated Cereals Development Programme (Rice)
  
• National Pulse Development Programme (NPDP)
  
• Oilseed Production Programme (OPP)
  
• Special Jute Development Programme (SJDP)
  
• Intensive Cotton Development Programme (ICDP, Cotton)

These are basically crop-oriented scheme with the main objectives of increasing production and productivity through better-input supply, extension support and infrastructural facilities. Supply of inputs at subsidized rate, seed village programme for production of certified seeds, laying of block demonstration, distribution of minikits to popularize new varieties, farm mechanization are some of the novel features of these schemes.

Highlights and achievements during 2005-06 of agriculture sector

• 628 Block Level Farmer's Awareness Campaign (Krushak Sampark Mela) observed in all the 314 blocks one in Kharif and one in Rabi.
  
• IEC material like booklets (1,80,000), leaflets (10,56,000) and posters (3,60,000) have been prepared and distributed to the farmers.
  
• 250 farmers have visited other states and 1000 farmers have visited within the state under Farmer's Exposure visit.
  
• 2500 demonstrations on popularization of Rabi cultivation in rainfed areas have been conducted.
  
• 9085 paddy minikit trials of different varieties including hybrids have been conducted during Kharif 2005.
  
• 31765 pulse and 51397 oilseed minikit trials have been conducted.
  
• 200 Farmer Field Schools (FFS) on rice, 42 FFS on Jute and 50 FFS on sugarcane have been conducted.
  
• 3325 farm ponds have been executed in the scheme enhancing sustainability of dry land farming system under work plan Macro management.
  
• Popularisation of farm machineries like tractor drawn rotavator, self-propelled rice transplanter, reaper, axial flow thresher, hydraulic trailer, paddy thresher/winnower are gaining momentum.
  
• An area of 1.77-lakh hectare has been brought under irrigation through installation of 62,972 private irrigation projects like shallow tube well, medium tube well and bore well.
  
• The per hectare power input has been increased from 0.60 kw to 0.714 kw

Horticulture

Horticulture based farming system is emerging as the most productive practice for augmenting additional income to the small landholders of the state. Various crops like fruits, vegetables, floricultural crops, medicinal and aromatic plants, spices and plantation crops are cultivated.

Area and production of Horticultural crops

National Horticulture Mission has provided a boost to the horticultural development of the state not only to be self-sufficient but also to emerge as a hub of export of horticultural produce to the neighbouring states as well as to other countries in the commercial horticultural crops and spices. Out of 30 districts 19 districts of the state has been covered under National Horticultural Mission.

Sericulture

Sericulture is an agro-based industry. The process involves rearing of silkworms for the production of raw silk, which is the yarn obtained out of cocoons spun by certain species of insects. The key activities of sericulture comprises of food-plant cultivation to feed the silkworms which spin silk cocoons and reeling the cocoons for unwinding the silk filament for value added benefits such as processing and weaving.

More than 40,000 Tassar rearers have organized 62 primary Tassar Rearers cooperative society. In order to preserve this traditional culture 15989 hectares of natural Assan & Arjun plantation and 6830 hectares of systematic Assan & Arjun block plantation of natural resources has been done.

To meet the basic seed requirement of the seed rearers 15 numbers of Pilot Project Centres have been setup in Tassar growing areas. Government of India has also setup 4 Basic seed Multiplication & Training Centres (BSMTC) for quality seed supply and one REC to transfer technologies from lab to land in order to popularize the industry.

Sericulture industry has following advantages

• High employment potential
  
• Provides vibrancy to village economics
  
• Low gestation, high returns
  
• Women friendly occupation
  
• Ideal programme for weaker sections of the society
  
• Eco-friendly activity
  
• Satisfy equity concerns

Key Strategies of Government to strengthen Sericulture industry are

• Self-employment opportunity to the tribal/BPL families.
  
• Plantation of trees like Assan & Arjun for utilization in silkworm rearing and production of Tassar Cocoons.
  
• Up-gradation of degraded forest land for Tassar culture
  
• Mulberry silkworm activity in in-door getting leaf from mulberry garden providing periodical income to the farmers all round the year.

Metal Sector

Orissa has become a preferred destination for foreign & domestic investors. The state is rich in mineral resources such as Iron ore-32.9%, Coal-24%, Bauxite-50%, Nickel-95%, and Chromite-98%. It has 36 projects for over 43 mtpa of steel (13 plants partly commissioned) that is more than US$30 bn investment. Under this sector four new aluminum projects with more than 4 mtpa capacity are under implementation (US$ 10 bn) and one Titanium project (US$ 0.25 bn). Major investors in the metal sector are POSCO, Tata Steel, Bhusan Gp, Jindal Gp, Essar Steel, Hindalco, Vedanta, Aditya Aluminum, L&T-Dubal etc.

Minerals and Metallurgical

Orissa is one of the richest mineral states in India, offering a tremendous resource base for industrialisation.75% of the landmass is covered with old mineral rocks, comprising 18.4% of India's mineral deposits. The largest sector of exports from Orissa comprises of minerals and metallurgical products which include iron ore, chrome ore, manganese ore and limonite amongst minerals and charge chrome, Aluminium and alumina, Ferro-manganese etc. among metallurgical products. These minerals toghether amount to Rs.6842 crore which is more than 84% of state's total export performance in 2005-06.

Engineering and allied industries

A well-developed mineral industry provides the required foundation for establishment of engineering and allied industries. Goods worth Rs.364 crores have been exported to overseas countries. The items such as aluminum conductors, cables, transformers, C.I Products, L.P.G cylinders, M.S plates, aluminium extrusions including some chemical and allied products like Refractories, cement, paper, tyres and tubes, pesticides, explosives, PVC pipes etc. were exported from Orissa to overseas markets.

Marine Products

Marine products has grown considerably in the recent past to reach the figure of Rs.373 crore during 2005-06.Orissa has a long coastline of 480 kms and Chilka Lake a vast expense of brackish water pisciculture.

Agro-based Industry

The varied agro-climatic condition of Orissa is ideal for the cultivation of diverse fruits, vegetables, plantation crops, spices, flowers and medicinal herbs. These are being cultivated on a rather limited scale at present, highlighting the prospects available for the development of horticulture and establishment of the agro-based industry. From this sector products like non-basmati rice, cashew nut, tomato puries, mango, guava, banana pulp/concentrate, spices, tamarind paste etc. are being exported from Orissa.The export from this sector was Rs.20 crore during 2005-06.

Information Technology (IT) and IT Enabled services (ITES)

The industrial and environmental climate of the state is conducive to transforming it into Information Technology (IT) and IT enabled services (ITES) leader of the country. Orissa has two Software Technology Parks of India (STPIs) in Bhubaneshwar and Rourkela and both have been instrumental in growth of the ITs exports from the state.

To facilitate promotion of IT industries in the state, the government of Orissa has established an INFOCITY spreading over 205 acre of land developed under the Export Promotion Industrial Park (EPIP) scheme of government of India. Besides Fortune Tower established at Bhubaneshwar is an ideal location for software and IT based export-oriented projects.

The export in this sector is also fast growing. All the IT majors like TCS, INFOSYS, IBM, WIPRO, and SATYAM have already established their software development units in Bhubaneshwar which is fast developing as an IT city. GENPACT, the ITES major has already moved in to Bhubaneshwar. From a level of Rs. 42.26 lakhs in 1997-98, the export has gone upto Rs. 465 crore in 2005-06. This is an outstanding achievement in this sector. IL&FS is developing an SEZ for IT sector at Bhubaneshwar.

The state has explicitly formulated the Information Communication Technology (ICT) policy-2004 to attract more investments in the state. The state government has established an ambitious target of exceeding Rupees one thousand crore-software exports by 2007-08.

Handloom

Orissa has a rich tradition of producing handloom products and the state retains its place of pride for unique and exquisite creations all over the world. In Orissa handloom sector provides enormous employment opportunities to the rural artisans, it is the largest cottage industry and provides employment and sustenance to 4 % of the population of the state. The handloom industry not only produces superior quality artistic fabrics but also produces utility fabrics for the common masses at cheaper price. The government is coming up with various schemes to strengthen the handloom market and diversify it to meet the competition.

The demographic picture of weaving sector is Schedule Tribe (ST) -1 %(6552), Schedule Cast (SC)-30%(123544) others-69%(288165) having 1.19 lakh number of looms in the state. Of which 88186 numbers of looms have been brought under the cooperative fold.

Key strategies of government to strengthen handloom sector are

• Strengthening the working capital base of the Primary weavers Co-operative societies to develop modernized looms, accessories, training to weavers, marketing support and design innovations.
  
• Promotion of handloom exports.
  
• Schemes such as work-shed-cum-housing, health package to weavers, Bunakar Bima Yojana and interest subsidy to PWCS on NABARD loan are operating in the undivided districts of Koraput, Bolangir and Kalahandi (popularly known as KBK districts) areas of the State with assistance from the state government, as well as the central government. under revised long term action plan schemes.
  
• Handloom & craft development of rural artisans in KBK district
  

Tourism

Orissa offers excellent opportunities in the tourism sector. Tourism is considered as a major source of forex earning for the state. Orissa is rich with fascinating tourist attractions with a myriad of monuments, beach resorts, nature tourism, adventure tourism and cultural heritage.

Bhubanehwar, the city of temples, the ancient Sun Temple at Konark, Lord Jagannath Temple at Puri, the Buddhist monastic complexes of Ratnagiri, Lalitgiri and Udaigiri are remnants of rich cultural art. The shore of Orissa is dotted with numerous beaches from Chandaneshwar in north to Pati-Sonepur in the south. The sanctuaries and wildlife parks such as Bhitarkanika, Similipal National Park, Chandaka Elephant reserve, Nandankanan, Chilka Lake are some of the major natural tourist attraction points in Orissa.

Major investments announced and are in the pipeline

• US$ 12 billion POSCO steel project at Para deep.
  
• The Orissa Government has constituted a joint working group to facilitate setting up of the proposed 12-million-tonne capacity steel plant by L.N. Mittal-owned Arcelor-Mittal in the State.
  
• Gail lines up US$ 3.25186 bn (Rs. 15000) crore projects in Orissa.
  
• Infosys technologies invest more than US$ 29.2614 million in its Bhubaneshwar development center.
  
• Reliance energy invests US$ 10.4141 billion to set up 12000 MW coal based power plant in Orissa.
  
• Tata steel limited plans 6 million MT steel project in Orissa with an investment of US$ 3.33832 billion
  
• Vedanta group is setting up $2.1 billion aluminum complex in Orissa.
  
• VISA steel ltd. has announced an investment of US$ 248.404 million in its proposed 0.35 million MT stainless steel plant in Orissa.
  
• GMR energy, Navbharat ferro and Aban Lloyd at Dhenkanal are planning power projects.

Mega projects

Mega Infrastructure Projects

• Development of industrial & social infrastructure in steel & mining corridors.
• Road sector- Rs 20,000 Crores over next 5 years
• Railways- Rs 6,000 Crores over next 5 years
• Major expansion of Paradeep Port
• 3 new ports at Dhamra, Gopalpur and Jatadhari Muhan (US$ 1.35 bn)
• BPO Complex
• 8 SEZs including 4 IT SEZ approved by Government of India
  
  • IT SEZ
    
  • Infocity
    
  • Infopark
    
  • Knowledge city &
    
  • IDCO-Genpact
• Bhubaneswar Airport modernization by AAI-250 Crores
• Integrated Textiles Park at Daleiput, Khurda

Upcoming IT parks

• Info Park
  
  • Creation of 4.2 mn. Sq. feet of built-up space adjacent to Info city.
    
  • To be developed by DLF
• Knowledge Industry Township
  • 784 acres integrated township located 15 kms from the city
  • To comprise an SEZ, residential, educational, commercial areas and business zones
  • To be extended to 1500 acres in Phase-I
  • 4000 acres to be further added in phase-II
• IDCO-Genpact BPO Complex
  • Jointly promoted by IDCO and Genpact
  • 29 acres of prime land in the heart of the city
  • 12 acres for Genpact, 7 acres for other BPO units

Investment Incentives

Incentives under new industrial policy

• Deregulation and simplification of rules and procedures.
  
• Rationalization of labour laws.
  
• Facilitation of industrial restructuring.
  
• Accelerated development of physical and social infrastructure through public-private partnership.
  
• Facilitating timely implementation of fast track projects.
  
• To attract mega-projects into the state, special package of incentives may be considered for new industrial projects with a capital investment of US$ 65.0468 million (Rs 300 crores) and above.
  
• To encourage and ensure the growth of small-scale sector a range of incentives such as cluster development approach, back-end financial support and market support will be provided.
  
• Single window clearance in order to promote faster and one point clearance.

Incentives under the Information & Communication Technology Policy

• IT and ITES units are declared as public utility services under the provisions of the industrial dispute act, 1947. They are allowed to work in three shifts as continuous processing units.
  
• Exemption from the clearance and routine inspections.
  
• Exemption from the payment of Sales Tax for a period of five years.
  
• No power cuts for important IT building infrastructure such as IT parks, STPI complex.
  
• Exemption from payment of electricity duty.
  
• Exemption from clearance from electrical inspector for approving contract demand of load and appliances to be fitted in an IT unit.
  
• Orissa Computer Application Centre (OCAC) would be the nodal agency, which would be the single window facilitator.
  
• New IT/ITES sector will be entitled to an interest subsidy at the rate of 5 percent per annum for a period of 5 years subject to a maximum of US$ 43,360.73
  
• Electrical energy consumption by IT/ITES units shall be charged at industrial rate subject to approval of approval of OERC.
  
• No stamp duty on land allotment to IT/ITES units.
  
• Special package of concessions will be offered to mega IT projects involving project cost of US$ 2.16752 million and above providing employment opportunities to more than 500 persons within a period of two years.
  
• Price preference of 10 percent to local IT units participating in the E-governance projects of the state government.

Investment Opportunities

• Mineral and mineral based industries
  
  • Sponge iron unit
    
  • Induction furnace
    
  • Coal washery
    
  • Co-generation power
    
  • Aluminum fluoride
    
  • Powder Metallurgy
    
  • Aluminum downstream
    
  • Gemstone Processing

List of major industries investing in Orissa

1. INDAL
2. Infosys Technologies Ltd
3. AES Corporation
4. Balasore Alloys Ltd (BAL)
5. Bargarh Cement Ltd (BCL)
6. Paradeep Phosphates Ltd (PPL)
7. Pohang Steel Company (Posco)
8. Reliance Energy Ltd (REL)
9. Satyam Computers Ltd
10. Mahanadi Coalfields Ltd (MCL)
11. National Aluminium Company Ltd (NALCO)
12. National Thermal Power Corporation (NTPC)
13. Steel Authority of India Ltd (SAIL)
14. Tata steel
15. Tata Refractories Ltd (TRL)
16. Utkal Aluminium
17. Vedanta Resources Ltd

Policy Framework

Industrial Policy 2001

Mission of this Industrial Policy

• Create a business climate conducive to accelerate investment in Industry & Infrastructure projects
• Raise income, employment and economic growth in the State
• Reduce regional disparities in economic development.

Key strategies of Government

• Encourage private initiative and restrict its intervention to such areas where it enjoys a distinct comparative advantage
• Invite private investment for the development and operation of quality infrastructure
• Promote the image of Orissa as an attractive destination for investment and tourism;
• Assume a proactive role in selected sectors such as
  • Mineral-based industries
  • Craft-based products
  • Agro and marine-based industries, industries based on medicinal herbs and minor forest produce
  • Tourism
  • Electronics, Information Technology and Biotechnology
• Encourage the creation of SSI clusters in similar lines of business;
• Proceed more decisively with the restructuring and consolidation of sick industrial units;
• Leverage the potential in SEZs to build concentration of technologically advanced manufacturing industries.

Full Text of the Policy

Information Technology Policy-2004

Vision

The Government of Orissa will strive to develop a well planned, robust and futuristic IT architecture in the state which will bring about positive changes in all walks of life and society, resulting in ease and convenience in transaction, augmenting employment opportunities to the educated youth and ushering higher economic growth in a definite time frame. Government will help IT reach the common citizen so as to narrow down the Digital Divide. Widespread applications of IT would establish a system where the citizens will receive good governance ensuring speed of decisions from a transparent government through an effective e-governance system. It will offer a hassle free, business-friendly environment to the ICT entrepreneurs by framing an attractive policy package and financial incentives. It will be the endeavour to attract investments from outside into the state.

Objectives

The Policy will provide

• Inexpensive access to Information
• Transparency in governance practice
• Doorstep delivery of host of services
• Increased employment
• High export turnover and economic growth

Full text of the policy

Port Policy

Objectives

The following objectives are identified for the new port policy

• To increase Orissa's share in the export and import sector, in national and international trade and commerce, by taking advantage of the liberalisation and globalisation process.
• To decongest the existing major ports, by developing minor ports, on the Eastern coastal region, so as to cater to the needs of increasing volumes of international and domestic traffic.
• To handle 70-80 MT of Cargo by 2006 in the port sector, in Orissa, as envisaged by the Government of India, Ministry of Shipping.
• To provide port facilities to promote export-oriented and port-based industries, which constitute the major chunk of industrial investment.
• To encourage shipbuilding, ship repairing, and ship breaking and to establish manufacturing facilities for heavy industries, in and around ports.
• To provide facilities for coastal shipping of passengers and inter-State cargo traffic and further extension of these services to West Bengal, Andhra Pradesh, Tamil Nadu etc.
• To take up suitable facilitating measures as well as policy initiatives for attracting private sector investments in the development and operation of existing and new minor ports.
• To establish connectivity of the ports with the riverine systems so as to increase the transportation of cargo through inland waterways.

Strategy

All this envisages an integrated port development strategy, consisting of creation of port facilities and development of infrastructure facilities, like roads, railways and inland waterways, in the hinterland. Large-scale financial outlays would be required to create these new facilities, along with matching infrastructure. In view of the fact that cape size ships are used in the transportation, to capture the economies of scale, ports would be developed, with direct berthing and speedy mechanical handling facilities, so as to improve turn around of ships.

Full text of the policy

Useful Web links

• Government of Orissa
  
• Industrial Promotion and Investment Corporation of India
• Orissa Industrial Infrastructure Development Corporation