Global economic headwinds are likely to impact Odisha's economy with the state anticipating slide in its GSDP (Gross State Domestic Product) growth for 2012-13 compared to previous years.
"We are expecting some decline in the state’s growth rate at the end of this fiscal owing to deceleration of Indian and world economy. So far, there is no impact of slow down on the state”, said Prafulla Chandra Ghadai, state minister for finance, public enterprises and excise.
Refusing to comment on growth projections for this fiscal, he said, “If mining activities pick up and industrial production multiplies in the state, we will be able to collect more taxes that will help us in absorbing the shocks of the world’s economic turmoil.”
Ghadai was speaking on the sidelines of 'HR Summit 2012', organized by the Utkal Chamber of Commerce Industry (UCCI) in association with the Odisha Economic Forum.
Though the state's economy has been consistently growing higher than the national average during 2007-08 to 2010-11, the state's latest Economic Survey has anticipated a lower growth rate of 7.18 per cent for 2011-12.
The state economy has grown, in real terms (at 2004-05 prices) at an average annual rate of 8.49 per cent in the first four years of the 11th Plan despite global economic slowdown.
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"The growth of the state will hover around 6.5 per cent to 7 per cent in this fiscal owing to global economic upheaval”, said Ramesh Mahapatra, president, UCCI.
"The suspension of many mines by the state government to curb illegal mining, decision to curb iron ore produce, inadequate coal for power companies and below par lending to micro small and medium enterprises by bankers would decelerate the growth of the state”, he added.
For arresting the fall of the rupee and to prop up the sagging economy, the central bank recently has increased FII limit for investment in government securities by $5 billion to $20 billion and allowed up to $10 billion in overseas borrowings by Indian corporates for repaying rupee loans. Long term investors such as Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks are allowed to invest in government debts up to $20 billion.