During 2024-25, Odisha’s economy grew by 10 per cent, and its size reached Rs 9.6 trillion at current prices. The Economic Survey 2023-24 had affirmed that the relative contribution of industry needs to increase while that of agriculture should ideally decline. A transitional change such as this generates gainful employment by absorbing the excess labour force in the primary sector. Hence, during 2024-25, with conscious government policy decisions, the share of industry in total Gross Value Addition (GVA) increased to 44 per cent compared to 28 per cent in 2023-24.
This significant rise in the contribution of Industry so far has been instrumental in raising its workforce share (from 23 p per cent to 26 p er cemt), thereby ensuring a corresponding decline in workforce share in agriculture (56 pc to 49 pc). Laudably, the workforce share in 2024-25 in the services sector has also jumped four per cent points during this time.
The underlying economic principles are sound. When an Industry increases its value-added share – it does so on the back of growing demand for goods and services. When the state recorded a real growth rate of 7.2 per cent in 2024-25 compared to India’s growth rate of 6.4 per cent, it was not merely optics. The state has gained significant purchasing power, raising its per capita income from Rs 98,005 in 2028-19 to a near-double Rs 1,82,548 in 2024-25.
Construction, electricity and other utility services registered 10.8 per cent and 11 per cent growth rates between 2020-21 and 2024-25 respectively. In this sense, the Odisha Economic Survey 2024-25 reassures that Odisha has the requisite fiscal-political munition to pivot from agriculture into industries.
Moreover, industrial growth has had many international examples of success. The economic growth of countries such as China, Korea, Taiwan, Malaysia, Singapore and Japan has been founded on cost-effective global-scale manufacturing activities. Along with accelerated growth, poverty rates have declined in many countries. Some economies have managed to achieve growth with equity. When overall growth accelerates, industry leads and grows faster than other sectors. All the aforementioned countries have a transition story that Odisha Economic Survey 2024-25 endorses.
The nature of growth with a high emphasis on the industrial sector is bottom-up, wherein poverty rates decline because employment perennially remains high. To this end, MSMEs are our golden ticket. Indispensable to Odisha’s economy, they contribute 40 per cent of exports and 45 per cent of total manufacturing output, generating employment second only to agriculture. Therefore, there are several positive forward-linkages of boosting small businesses.
They are the foremost beneficiaries of state schemes which benefit in turn from the income these businesses generate.
This, however, has to be coupled with quality social overheads. The Economic Survey depicts how public expenditure on social services like education and health underlines government’s commitment to improving citizens’ quality of life. Odisha’s social sector expenditure was Rs 127,000 crore in 2024-25 (BE). This is nearly 23.6 per cent higher than 2023-24 (RE).
A progressive ecosystem is ushering in industrial growth in Odisha which is witnessing a wave of industrial investment. Manufacturing, mining and quarrying, the major drivers of industrial growth in Odisha, grew at 10.9 per cent and 9.0 per cent respectively over between 2020-21 and 2024-25. The state acknowledges the critical role of developing robust industrial infrastructure to enhance trade industry and higher productivity in the farm sector and hosted Utkarsh Odisha: Make in Odisha Conclave 2025 to drive economic growth and elevate Odisha as a globally competitive investment destination.
The Economic Survey was not limited to the assessment of the ongoing year and the projection for next year. It discussed the medium to long-term challenges in detail which should guide policymaking.
(Mohanty is professor in Finance, XIMB; Routray is an economist at Centre of Excellence in Fiscal Policy & Taxation, XIM University)