State GDP To Contract By 13%, Warns Orissa Economics Association Study

Bhubaneswar: The gross state domestic product (GSDP) of Odisha will contract by around 13 per cent during 2020-21 due to the prolonged coronavirus-induced lockdown, according to an Orissa Economics Association (OEA) study.

A report published by OEA, titled ‘COVID-19 and the Economy of Odisha: Challenges and the Way Forward’, says this will have a significant bearing on employment prospects and fiscal space of the state.

A shortfall of Rs 11,313 crore worth of revenue from the budget estimate of 2020-21 has been projected.

It points out that in order to spend the budgeted amount of ₹ 1,50,000 crore during 2020-21, the state needs to borrow Rs 35,763 crore which will be around 6.3 per cent of the GSDP.

The study has suggested the Naveen Patnaik-led state government should submit a memorandum to the 15th Finance Commission and Government of India to relax FRBM norms for at least two years and increase the borrowing limit.

The first priority of the state, in these trying times, should be to provide best possible healthcare to COVID and non-COVID patients, followed by ensuring food security and livelihood security of the vulnerable sections of the society.

As per government information, over 5 lakh migrant workers have returned to the state, but the report says this number is likely to be much more. As per its estimate, around 20 lakh migrant workers will return to Odisha within two months.

Urging the state government to create an online database on the nature, extent, skill profile, place (city/town/state) of work and native area in Odisha of all migrant workers, the report suggests in order to engage semi-skilled and skilled workforce, immediate measures must be adopted towards creating bases for rural enterprises at the Panchayat level.

Among other key findings of the report, agriculture will be the saviour as livelihood of 50 per cent of the population in Odisha can be protected by ensuring a good kharif crop. Hence, the state should ensure timely availability of all agricultural inputs free of cost while interest on agricultural loans be waived for 2019-20 and 2020-21.

The state government has also been advised to create a conducive business environment to attract private capital set to withdraw their investment from China and move to India.