CHAPTER V

. ·~ .

STATE OF ORISSA'S ECONOMY: THE POST-COLONIAL SCENARIO

Introduction

The most conspicuous aspect of India's development through

planning, now over a long span of four decades, has been the

perpetual backwardness of certain regions, notwithstanding their

rich natural resource endowment and abundance of labour supply.

A very striking case of perdurable underdevelopment, going by any

economic indicators, is, obviously, the State of Orissa. The

colonial antecedents had definitely set the initial conditions of

an entrenched backwardness of the State's economy, making it one

of the poorest starters in the wake of planned development in the

country. Often referred to as an instance of paradox of poverty in

plenty, Orissa has secularly remained at the lowest rung in terms

of inter-state income-based ranking.

Her~ in this ~hapter, ~ith a view to understand the State's

economy during the post-colonial phase, we will analyse the

peJ;:,formanq_~ of :major sectors of_ the economy, with special reference

to changes in sectoral shares. Subsequently, we will focus on two

major eqpQQmic_~Gt~yitiesL viz., agriculture and trade. A detailed

analysis of the industrial structure will be taken up in the

following chapter.

5.1 State Income: Sectoral Growth Rates and Trends

To have a broad understanding of the process of development

of Orissa's economy in the post-colonial phase, it would be proper

to examine the movement of sectoral shares in the State income.

We have presented shares of three major sectors primary,

secondary and tertiary - in the Net State Domestic Product for the

period. 1960/61 to 1988/89 graphically. (See Fig. 6".1). Barring

minor fluctuations in the primary sector in the post-1970s, there

have been practically no noticeable shifts in any of the sectoral

shares. We notice a near stagnant state of growth of all the three

sectors with the share of primary sector hovering around 60-65 per

cent, secondary, 10-15 per cent and tertiary, around 20-25 per

cent. It is a uniquely dismal phenomenon at least in comparison

with other states of the Indian federation.

Further, we have plotted th~ shares (in the.NSDP) of selected

important sectors in order to trace the trend of growth of these

individual sectors in the economy. (See Fig. 5. 2) The sectors

chosen are agriculture, manufacturing and mining and quarrying.

It can be seen that the share of agriculture has been fluctuating,

almost in tune with the primary sector as a whole, after the 1970s.

Given that we cannot be conclusive about any particular trend -

upward or downward. The share has varied between 55 - 65 per cent

over the period 1960/61 to 1988/89. The share of manufacturing

sector has hardly made any progress. Though a mild upward trend is

discernible from mid-1970s onwards, for all practical purposes, the

share has remained between 6-11 per cent over the entire period.

The share of mining and quarrying (a potentially significant sector

156

70·

50

40·

30·

20·

FIG. 5. 2 SHARES OF AGRICULTURE, MINING & QUARRYING

AND MANUFACTURING, ORISSA: 1960-1989 ---·------·

50

40·

~ 't: · ?K ~ :+~. :;:

"*

-·1!1·- Agr. -+- M&Q -·->t;-- Mfg.

FIG. 5:1 SHARES OF PRIMARY, SECONDARY AND

TERTIARY SECTORS,ORISSA: 1960-1989

·-a- Prim. -+- Secon. --->r:· Terit.

157

of the State's economy), unfortunately, presents no signs of change

and has been languishing at a very low ebb - less than 5 per cent -

over the period of almost three decades.

Before proceeding to present a more detailed analysis of the

structural shift patterns in the economy, it may be useful to

discuss the sectoral growth rates over the period 1960/61 to

1988/89 for which reliable and comparable data are available.

The three periods chosen here are 1960/61 to 1970/71, 1970/71 tq

1980/81 and 1980/81 to 1988/89. The 1960s growth performance

definitely contained the elements of the so-called 'take-off' of

the State's economy. It is in the year 1970/71 that the Central

Government 'formally' recognised, for the first time, the need for

policy formulation to reduce regional dis pari ties. 1 The 1980s

started off with th.e publication of the Reports of the National

Committee on Development of the Backward Areas (particularly the

one on 'Industrial Dispersal'), partly reviewing the '70s

performance as to developing lagging regions and partly suggesting

the way-outs for the future. It also marked the large scale opening

up of the national economy mainly through import liberalisation.

We shall analyse the growth rates keeping the above periodisation

in view.

Table 5.1 presents the compound annual growth rates of

selected individual sectors as well as the three major sectors

(primary, secondary and tertiary) during different time periods.

It also gives the growth rates of NSDP and per capita income (PSDP)

The reports of Pande Committee and Wanchoo Committee (submitted in 1969) were the first major steps in this regard.

158

for the same periods. It is interesting to note that a discernible

pattern of growth emerges as between periods. In all sectors the

growth rates during 1960/61-1970/71 are much higher as compared to

those during any of the remaining four periods. 2 The most

impressive growth rates during the 1960s have occurred in the

'registered manufacturing' sector (as high as 21.62 per cent) and

a great proportion of it could be accounted for by the

establishment of the first public sector steel plant in India, at

Rourkela. The substantial growth of the agricultural sector (10.39

per cent) could partly be due to good monsoon conditions as also

the initial impact of the so-called 'Green Revolution' introduced

around mid-sixties. The 1970s have witnessed the lowest growth

rates practically in all sectors and even significant declines in

specific sectors (viz., agriculture, mining and quarrying and

registered manufacturing) as compared to the previous decade. We

notice a marginal improvement in the growth rates of all the

sectors in the 1980s over the previous decade; the major increases

have taken place in mining and quarrying', 'unregistered

manufacturing' and the tertiary sector in general. The point that

needs to be underscored is that in both 1970s and 1980s none of

the sectors could attain the very high growth rates achieved during

the 1960s. This observation is corroborated when we consider the

two longer periods 1960/61 to 1988/89 and 1970/71 to 1988/89.

2 With the sole exception of 'unregistered manufacturing' sector, which, incidentally formed a very small proportion of the NSDP all through the sixties.

159

Table 5.1

Sectoral Growth Rates, Orissa: 1960[§1 - 1988/89* (Percentages)

------------------------------------------------------------------------------Year Agr. H&Q Mfg. ReMfg. UnMfg. Prim. Seco. Tert. NSDP PSDP ------------------------------------------------------------------------------1960/70 1970/80 1980/88 1960/88 1970/88

Source:

Note:

10.39 9.61 11.41 21.62 2.66 10.26 8.53 9.13 9.81 7.31 2.57 -0.55 4.63 5.45 2.62 2.50 4.57 3.32 2. 92 1.02 2.86 8.04 5.38 5.70 4.64 3.05 5.77 5.30 3.93 1. 78 5.39 5.43 7.22 11.04 3.21 5.37 6.31 5.93 5.62 3.45 2.70 3.18 4.96 5.56 3.52 2.75 5.10 4.19 3.37 1.36

Calculated from Central Statistical Organization (CSO) , Estimates of State Domestic Product. Various issues.

* Annual Compound growth rates. Figures at constant (1970/71) prices.

All sectors excepting 'unregistered manufacturing' have attained

higher growth rates in the former period compared to the latter.

The growth rates of both NSDP and per capita income repeat the same

story as of the individual sectors. The per capita income growth

rate of 7.31 per cent during the 1960s was sizeable achievement

and, certainly, much above many other states for the same period. 3

The sixties growth, however, had occurred sporadically in very few

secto~s and locations of the State and, hence, the high growth rate

figures, by no chance, represent a 'prosperous' phase in the

State's development experience.

5.2 Structural Shifts

As a first step for analysing structural shift pattern of

O~issa's economy, one notes (Table 5.2) that the workforce engaged

ip agriculture (accounting for three-fourths of the total) has

3 It is, however, arguable as to whether per capita income is a useful indicator of the level of development.

160

declined from around 80 per cent in 1971 to 77 per cent in 1981.

This shift has also gone hand in hand with a drop in the income

share accruing from it by -1.8 per cent during 1971-1981 and by

-2.8 per cent between 1971 and 1987. What is further learnt 1s that

a marginal increase in proportion of work-force has been noticed

in both the secondary and tertiary sectors between 1971 and 1981,

to the tune of 1.5 per cent and 1.1 per cent respectively. Both

these ·shares are below the all-India figures and, certainly, far

below those of the advanced states.

The most disturbing aspect of the shifts becomes vivid when

one considers the sectoral shares in the SDP, between 1971 and

1987; the secondary sector's share has fallen from 12.3 per cent

to 11.4 per cent and that of the tertiary sector (amounting to more

than one fourth of the total SDP) has improved impressively from

24.7 per cent in 1971 to 28.4 per cent in 1987.

It has been accepted conventionally that in a dynamic regional

context, shares of both output and workforce in the three major

sectors, with reference to a given population base and level of

industrialisation, would move from primary to secondary and then

to the tertiary sector. 4 Rapid industrialisation, beyond doubt,

acts as a catalyst for the overall growth of the e~onomy with

augmenting its backward and forward linkages in both primary and

tertiary sectors. Viewed in this perspective, the structural

changes occurred in Orissa's economy (where percentage change in

both agricultural and industrial output share has been negative and

Kuznets, Simon (1979).

161

a drop in agricultural workforce has not been adequately

compensated for by a meagre rise in industrial workforce), if at

all to be seen through a significant upward shift in the output

share (by 3.7 per cent) of the tertiary sector, would necesarily

be disappointing.

Table 5.2

Sectoral Distribution of Workers and SDP in Orissa

Workers SDP %change Sectors

1971 1981 % change 1971-72 1981-82 1986-87 1971-82 1971-87

Agriculture & Allied 79.6 77.0 - 2.6 63.0 61.2 60.2 - 1.8 - 2.8 industries

Cultivators 49.2 47.0 - 2.2 Ag. labourers 28.3 27.8 - 0.5

Industry 7.3 8.8 + 1.5 12.3 12.9 11.4 + 0.6 - 0.9

Manufacturing 5.9. 7.0 + 1.1 7.3 6.9 5.8 - 0.4 - 1.5

Mining & Quarrying 0.8 0.9 + 0.1 2.0 1.8 1.9 - 0.2 - 0.1

Coostruction 0.6 0.9 + 0.3 2.7 3.7 3.0 + 1.0 + 0.3

Services 13.1 14.2 + 1.1 24.7 25.9 28.4 + 1.2 + 3.7

Trade & Carrnerce 3.3 4.0 + 0.7

Transport, Storages and 1.4 1.6 + 0.2 Ccmm.mications

Source: CMIE (1990) •

Comparing the above changes with all-India figures, one finds

that the decline in workforce in agriculture in the State has been

less_than that at the national scene (-2.6 per cent in Orissa and-

3.3 per cent in all India between 1971 and 1981). Secondly,

considering the increase in the industrial workforce it has once

again, been below the national figure (2.3 per cent for all-India

162

.wh•r~as _1.5 pe~~~ent for Orissd) ._Furthe~, the workforce change in

the tertiary sector has been practically the same for both Orissa

and all-India. Comparing the changes in the share of sectoral

output to SDP of various states one finds that the compound annual

rate of increase between 1970-71 and 1986-87 has been the lowest

in the case of Orissa -- 2.1 per cent for the industrial sector

and 4.1 per cent for the tertiary sector. (See Table 5.3)

Table 5.3 0

Structural Changes in State Income: 1970/71 - 1986/87 (1970/71 prices)

Compound annual rate of increase (%) States

Agriculture Mining & Manufacturing

Services

Punjab 4.4 4.9 6.2 Haryana 2.3 6.8 8.0 Maharashtra 1.2 5.0 4.9 Gujarat -1.0 4.3 5.0 West Bengal 3.0 2.1 4.2 Tamil Nadu -0.2 4.9 6.3 Karnataka 2.1 5.2 5.3 Andhra Pradesh 1.0 6.2 6.1 Rajasthan 1.1 5.0 4.7 Kerala -0.1 3.6 412 Uttar Pradesh 2.2 6.6 4.6 Assam 2.2 4.9 6.9 Madhya Pradesh 1.0 5.6 6.3 Orissa 2.0 2.1 4.1 Bihar 1.9 4.4 5.5

Source: Same as above.

It is essential to note here that the structural changes in

advanced states like Tamil Nadu, Rarnataka, Gujarat, Maharashtra

and Haryana, especially, between 1971 and 1981 have been of

significant consequences in terms of diversifying their industrial

structure, and in that process acting as a stimulant for both the

primary and tertiary sectors. However, in the case of Orissa,

which has not been keeping pace with the national average, there

163

has been no important positive shifts of a preliminary nature. This

has been clearly reflected in the per capita SDP of 1970-71 and

1986-87, both at current and constant (1970-71) prices, where the

State ranks 16 among ~7 major states. (See Table 5.4). The annual

rate of growth of per capita SDP at constant prices between 1970-

71 and 1986-87 has been 0.7 per cent and 9.2 per cent at current

prices, both below the same at the all India level. All these

point to the fact that the State's economy has remained practically

stagnant, in fact, often shown a negative growth pattern, and the

national growth process has definitely bypassed this State.

Table 5.4

Growth of Per Capita State Income: 1970/71 to 1986/87

States

Punjab Haryana Maharashtra Gujarat West Bengal Himachal Pradesh Tamil Nadu Karnataka Kerala Jammu & Kashmir

.. Andhra Pradesh Assam Rajasthan Uttar Pradesh Madhya Pradesh Orissa Bihar

All India

At current prices

1970-71 (Rs.)

1070 877 783 829 722 678 581 641 594 548 585 535 651 486 484 478 402

672

1986-87 (Rs.)

4719 3925 3793 3223 2988 2908 2732 2486 2371 2344 2333 2204 2150 2146 2020 1957 1802

2824

Annual gr. rate(%)

9.7 9.8

10.4 8.9 9.3 9.5

10.2 8.8 9.0 9.5 9.0 9.3 7.8 9.7 9.3 9.2 9.8

9.7

At 1970-71 prices

1986-87

1652 1233 1039

860 860 855 828 799 639 684 758 605 646 607 583 535 482

810

Annual gr. rate(Rs.)

2.8 2.2 1.8 0.2 1.1 1.5 2.2 1.4 0.5 1.4 1.6 0.8

1.4 1.2 0.7 1.1

1.2

Source: CMIE (1990) and Chandhok, H.L. and the Policy Group (1990), Vol.I.

Note: States are ranked according to third column.

164

5.~ Agriculture

Any an~sis of Orissa's development process must involve an

enquiry into the state of agriculture, the most significant

economic activity in the State accounting for half the State income

and three-fourths of the total employment. As is well known,

besides being the predominant source of li velih'ood, this sector's

growth determines demand for both consumer goods and services

through a variety of linkages. !I Particularly, the demand for

industrial goods by the massive rural population is to a great

extent dependent upon increased income from agriculture. 6

Similarly, a growing agriculture enhances demands for production

inputs and supplies raw materials to processing, transport and

marketing units. 7 Further, the rural non-farm activity is closely

linked to agriculture. Whereas a sizeable proportion of rural

industries involves agro-processing and the manufacturing, repair

and supply of farm inputs, the "dominant sectors in the non-farm

economy consist of trade and service establishments that cater

largely to rural consumer demand". 8 Needless to underescore, the

industrial backwardness is intrinsically associated with the poor

agricultural scenario in the State. The following analysis will

highlight the important aspects of the agrarian economy in Orissa

and the constraints facing it.

II

6

7

8

See, Mellor, J.W. (1976).

See, Rangarajan, C. (1982)

See, Johnston, B.F. and Kilby, P. (1975).

Hazell, Peter B.R. and Haggblade, Steven (1991), p. 515.

165

As noted earlier, the share of agriculture in the State

Domestic Product at constant (1970/71 prices) has been fluctuating

and often declining, at least since the 1970s. In fact, from 63.09

per cent in 1971/72 it has come down to 61.2 per cent in 1981/82

and, further, to 60.2 per cent in 1986/87. Prima facie, such a

decline may normally be attributed to the process of development

itself where the proportionate shares {in SDP) of other sectors

{secondary and then tertiary) would increase over time due to

greater production and productivity in the non-farm sector.

However, the performances of the non-agricultural sector have been

quite 'disturbing'. 9 The other explanation regarding declining

agricultural SDP relates to the operation of Engel's Law, where,

with rise in income, proportion of expenses on food is reduced.

In any case, the fact remains that the rate of fall of income from

agriculture in the State is much higher than that at the national

level. 10 Process of development notwithstanding, the relatively

greater pace of decline necessarily suggests the absence of

sustained growth in agriculture in the State. 1 1

It needs to be noted that even in a situation of shrinking

share of agriculture in the SDP, the proportion of workforce

dependent upon agriculture {both cultivators and agricultural

9 The fact that downward moving secondary sector contributes to the SDP and an unusual growth of the tertiary sector, has been dealt with in some detail in the previous section.

to Whereas for all-India, the percentage share of agriculture in total State income {at current prices) has fallen from 46.4 per cent {average of 1970-73) to 33.8 per cent (average of 1986-89), the same has declined from 63.8 per cent to 44.0 per cent for Orissa over the same period.

11 Similar experience has also been noted in Tamil Nadu. See MIDS (1988}, p. 110.

166

labourers) has hardly ch~nged over. th• period of three decades.

As can be seen from Table 5. 5, this proportion has remained

practically the same for the extreme years, 73.8 per cent for 1961

and 73.1 per cent for 1991. This is an alarming situation for the

Table 5.5

Total Population and Distribution of Workers, Orissa: 1951-1991 (In lakhs)

Year Total Annual Workers Population Compound ---------------------------------------------

Gr.Rate Cultivators Agricul- Others Total (%) tural

Labourers ------------------------------------------------------------------------------1951

1961

1971

1981

1991

Source:

146.46

175.49 0.62 43.53 13.04 20.05 76.62 (56.81) 73.83* (17.02) (26.17)

219.45 1.82 33.68 19.38 15.45 68.51 (49.16) 77.44* (28.28) (22.56)

263.70 2.26 40.53 23.97 21.85 86.35 (46.94) 74.70* (27.76) (25.30)

315.12 1.85 45.57 29.73 27.76 103.06 (44.21) 73.06* (28.85) (26.94)

Govt. of Orissa (1987), Agricultural Statistics of Orissa, Bhubaneswar: Directorate of Agriculture and Food Production. Govt. of India (1991), Census of India, Series 1, India, Provisional Population Tables: Workers and their Distribution Paper -3 of 1991. New Delhi: Registrar General and Census Commission.

Notes! 1. Figures in brackets indicate percentages to total workers 2. Starred figures are aggregations of the proportions of 'Cultivators'

and 'Agricultural Labourers'.

most dominant section of the workforce hence it implies a relative

decline per worker income overtime as compared to the other

sectors. The most striking aspect of the workforce is the

tremendous growth of the agricultural labourers, both absolutely

and relatively, between 1961 and 1991. Their proportion to the

total main workers has steadily increased from about 13 per cent

1C.'7

in 1961 to 19 per cent in 1971, to 24 per cent in the next decade

and 29 per cent in 1991. Additionally, the share of cultivators

in the total workforce has steadily fallen from about 57 per cent

in 1961 to 44 per cent in 1991. These are significant trends

depressing the income of three fourths of the total workforce.

Further, the pattern of land ownership determines, to a large

extent, the extent of gains that can be derived from the farm

sector through advanced technology as well as scientific farm

management. In Table 5. 6, we have presented size-class wise

distribution of operational holdings both in terms of number and

area occupied, over the period 1970-71 to 1985-86. The most

significant aspect of the distribution is that, the proportion of

marginal farmers (below 1 hectare) has grown substantially from

43.3 per cent in 1970-71 to 52.1 per cent in 1985-86, 12 whereas the

shares of farmers in the small, medium and large categories have

gradually declined. It is important to note that as far as the

agrarian structure is concerned, the marginal and small farmers

(i.e., below 2 hectares) have accounted for three-fourths of the

total farmers cultivating about 40 per cent of the total

operational area; these shares have practically remained unchanged

over the period 1970-86. This has seriously constrained any scope

for modernising agriculture and naturally has resulted in poor land

management and low productivity.

12 Their absolute numbers have also increased steadily from 14.8 lakh in 1970-71 to 18.7 lakh, a rise of about 30 per cent.

168

Table 5.6

Distribution of Operational Holdings: Orissa 1970L71 -1985L86 (Nos. in '00 Area in '00 hectares AOH in hectares)

Marginal Small Semi-Med. Medium Large Total

1970/71 N 14756 11207 4526 3094 491 34074 (43.3) (32.9) (13.3) (9.1) (1.4) (100)

A 7699 17139 13627 17947 8075 64487 (100) (11. 9) (26.6) (21.1) (27 .8) (12. 5) AOH 1.89

1976/77 N 16751 10435 6021 2333 361 35901 (46.7) (29.1) (16.8) (6.5) (1.0) (100)

A 8532 14651 15999 13045 5285 57512 (100) (14.8) (25. 5) (27 .8) (22.7) (9.2) AOH 1.60

1980/81 N 15558 8928 6106 2389 285 33266 (46.8) (26.8) (18.4) (7 .2) (0. 9) (100)

A 7926 12198 15810 13181 3927 53042 (100) (14.9) (23.0) (29.8) (24.9) (7 .4) AOH 1.59

1985/86 N 18680 9100 5830 2040 210 35860 (52.1) (25.4) (16.3) (5. 7) (0.6) (100)

A 9190 12730 15670 11670 3340 52610 (100) (17. 5) (24.2) (29.8) (22.2) (6.3) AOH 1.47

Source: Calculated from CMIE (1991a).

Notes: Marginal <1bect. N: Number Small 1 to 2 beet. A: Area Semi-Med. 2 to 4 bect. AOH: Average Op. Holdings Medium 4 to 10 hect. Large 10 beet. and above.

Bracketed figures represent percentages to respective row totals.

5.3.1 Cropping Pattern and Productivity:

The cropping pattern of Orissa has changed slowly and quite

unimpressively over the last four decades, 1950/51 to 1989/90. We

have presented data on six time points in Table 5.7. Some distinct

features can be noted. Though rice has maintained its position as

169

the most dominant crop, its share in Gross Cropped Area (GCA) has

fallen drastically, from above 60 per cent (in 1950/51, 1960/61 and

1970/71) to 46.5 per cent in 1989/90. In absolute terms, there has

been hardly any increase in the area under rice, even from 1960s

onwards. 13

The other crop group which has actually gained importance,

mid-seventies onwards, is 'pulses'. It has come to occupy as high

as about 20 per cent of total cropped area throughout the 1980s.

High valued pulses such as gram and arhar (tur) together account

for a meagre 1.5- 2.5 per cent of the GCA. Hence, as far as growth

of 'pulses' is concerned it is the miscellaneous low valued pulses

that have shot up in area during the last fifteen years or so. The

single most notable growth in area has taken place in 'oilseeds'

the area under which has increased from a very low proportion of

3-5 per cent during the two decades since 1950/51 to above 10 per

cent towards the second half of the 1980s. The two major oilseeds

- groundnut and sesarnurn - make for about 7-8 per cent of the GCA.

In any case, foodgrains continue to occupy about three-fourths

of the GCA (with the relative share of 'total cereals' declining

as compared to 'pulses') all through the period 1950/51 to 1989/90,

suggesting that very little diversification towards high-valued

13 Period

1960-65 1970-75 1986-90

Source:

Area under rice ('000 hectares)

(5-yearly averages)

4187.8 4559.6 4233.2

CMIE (1991a).

170

non-food cash crop has occurred in the State all these decades. The

broad picture that emerges from the analysis of cropping pattern

in Orissa over the four decades points to the absence of agrarian

dynamism in terms of shifting towards high income generating crops

as also taking advantage of the modernisation process in

agriculture elsewhere.

Table 5.7

Cropping Pattern, Orissa: 1950/51 - 1989/90 (Percentages)

1950/51 1960/61 1970/71 1980/81 1984/85 1989/90

Rice Wheat Maize Ragi Jowar Bajra Coarse Cereals Total Cereals Gram Arhar Other Pulses Total Pulses Total Foodgrains Groundnut Sesamurn Rapeseed & Mustard Other Oilseeds Total Oilseeds Cotton Jute Mesta Other Fibres Total Fibres Sugarcane Potato Tobacco Other Crops

Gross Cropped Area

64.37 0.02 0.38 2.02 0.12 0.02 2.66

67.05 0.42 0.18

0.62 67.65 0.42 1. 70 0.43 0.42 2.97 0.04 0.75

0.13 0. 92 0.42 0.05 0.02

27.97

100

61.87 0.11 0.36 1.09 0.11 0.08 2.42

64.40 0.32 0.23 7.50 8.05

72.45 0.39 1.50 0.75 0.93 3.57 0.13 0.65 0.13

0.91 0.41 0.16 0.07

22.43

100

66.13 0.19 1.06 2.31 0.25 0.06 6.08

72.40 0.31 0.75

11.44 12.50

4.90 1.04 1. 35 0.81 1.68 4.88 0.04 0.65 0.41 0.05 1.15 0.44 0.31 0.21 8.11

100

47.92 0.77 2.07 3.84 0.42 0.10

10.56 59.25 0.57 0.94

18.22 19.73 78.98 1. 97 1. 78 1.85 2.82 8.42 0.05 0.50 0.48 0.11 1.14 0.56 0.09 0.24

10.57

100

49.05 0.62 1.88 3.27 0.41 0.11 7.27

56.93 0.46 1. 53

16.90 18.88 75.81

3.40 3.00 1.29 2.78

10.47 0.02 0.48 0.46 0.13 1.09 0.52 0.13 0.20

11.78

100

46.49 0.41 1. 79 2.59 0.30 0.07 0.84

52.49 0.49 1. 74

19.09 21.31 73.81

3.93 3.55 1.49 2.96

11.93 0.08 0.32 0.36 0.14 0.90 0.51 0.12 0.16

12.58

100

Source: Govt. of Orissa (1987), Agricultural Statistics of Orissa, Directorate of Agriculture and Food Production, Bhubaneswar; Chandhok, H.L. and the Policy Group (1990), Vol. II.

171

Along with the changes in area under various crops, it would

be worthwhile to take note of the performance of the crops in terms

of their productivity. In Tabl'~ 5. 8 Ne have presented a

comparative picture of yield of major crops in Orissa as set

against the all-India average of the resp~ctive crops.

Crop

Table 5.8

Re_lative Yield of Major Crops, Orissa and All-Indi£ (Kg/hectare)

Period/CARG Yield*

Orissa All-·India

Rice

'Other Pulses' (Excluding Gram &: Tur)

Total Foodgrains

Groundnut (Pods)

1967-70 1987-90 CARG (%)

1967-70 1987-90 CARG (%)

1967-70 1987-90 CARG (%)

1967-70 1987-90 CARG (%)

Source: CMIE (1991b}.

Note * Three yearly averages.

97 3 1060 1175 1637 0.9 2.2

473 371 492 438 0.2 0.8

888 790 967 1284 0.4 2.5

1203 711 1423 972

0.8 1.6

CARG denotes compound average annual rate of growth.

It can be observed that the yield of rice, the most:. domin;:mt

crop of Orissa, remains far below that of all-India average in both

the time periods chosen and it is significantly low in the second

period. 14 Further, the compound annual rate of growth (CARG) of

yield of rice between these two periods shoHs an increase of a mere

0.9 per cent in Orissa, as against 2.2 per cent at tl1e all-India.

1 1 It is about 28 per cent less than the national ;:~vr;rage

172

The yields of 'other pulses' (excluding gram and tur) over the two

periods have remained above all-India averages, but again the CARG

in Orissa remains below that in all-India. Though the yield of

'total foodgrains' of Orissa during the second period registered

an increase over that during the first period, the yield during

1987-90 has fallen far short of the all-India figure for the same

period . 1 !I

The only heartening performance has occurred in groundnuts 16

where, during both the periods, the yield rates have remained

significantly higher than the corresponding all-India figures.

Moreover, the productivity of groundnuts in Orissa, specifically

during the 1980s, has remained one of the highest in the country.

One thing needs to be noted here is that, for all the crops

selected here the CARGs have remained much lower than those at the

all-India level, suggesting a very sluggish improvement in the

productivity of the crops in Orissa. Further, in totality, only

with the exception of groundnut, none of the major crops of Orissa

seems to have made any progress over decades and has lagged behind

the national efforts at agricultural development, including the

much talked of 'Green Revolution'.

The dismal state of agriculture in Orissa, to a large extent,

reflects, on the one hand, low use and availability of modern

inputs like high yielding varieties of seeds, chemical fertilisers,

10 The yield has been one-third of that at the national level.

16 Notwithstanding a very small proportion of GCA this crop occupies -about 4 per cent since the mid-eighties.

173

_pesticides, etc., and on the other, the impact of the vagaries of

monsoons.

A very crucial aspect of agricultural development in both

augmenting the use of modern inputs and also saving crops from the

uncertainties of monsoons lies in creating greater irrigation

facilities. A discussion on poor performance of agriculture in

Orissa brings us to the question of investment in irrigation

projects, an infrastructure utterly neglected all through the

development process. The State Government has, in fact, been

allocating a fairly high proportion of its Plan expenditure for

both agriculture and irrigation.

Sl. No.

Sector /Plan

1. Agriculture and Allied Services 2. Co-operation 3. Irrigation and Power 4. Industry and Mining 5. Transport & Coamunication 6. Social Services 7. Others (Miscellaneous)

Total

Source: Rath, Binayak (1987), p. 99.

II

18.02 9.20 0.88 12.60

26.15 45.90 4.56 4. 50

14.72 7.00 25.52 17.20 0.15 3.60

100.00 100.00

Table 5.9

III Annual IV

9.71 12.57 16.44 9.17 6.05 2.76

35.95 4 3. 71 48.17 9.00 9.56 8.64

17 .15 13.90 6.52 17.10 13.54 17.11 1. 92 0.67 0.36

100.00 100.00 100.00

!Percentages)

v VI VII (Proposed)

15.72 15.75 11.71 2.41 2. 05 1. 30

40.99 54.93 53.54 4.12 6.50 4.97 7. 76 6. 57 5.88

21.93 13.50 21.57 1.03 0.90 1. 03

100.00 100.00 100.00

As can be seen in the distribution of Plan expenditure under

different heads, (Table 5. 9) 'Agriculture and allied activities'

and 'Irrigation and Power' together constitute the highest

proportion all through the Plans, often as high as 70 per cent.

However, considering the enormity of the target, the total outlays

174

remain much inadequate in real terms . 17 An insightful and detailed

study by the Reserve Bank of India hA-s pointed out the vastness of

the target in terms of available i .. l·:rigation potential. 10

5.4 Cooonodity Flows

The pattern and composition of inflow and outflow of

commodities have a significant bearing on the economic status of

a region. Particularly, in the case of a backward region,

notwithstanding Central assistance through a variety of mechanisms,

efforts at improving the 'health' of the economy are often offset

by the undesirable trade flows, which, in turn, adversely affect

both the consumption and investment levels of the region. It is in

this context that we would analyse the trade situation i11 Orissa

during the period 1959-88.

Considering only the principal commodities, we ltave broadly

classified them into primary, semi--processed (or intermediate) and

manufactured goods. In the absence of value figures (whicl1 would

have been more revealing) we have preseuted the quantities only.

The most striking aspect of Table 5.10 is that a substantial number

of items exported from the State are p~imary products, practically

in the raw form. Among the agricultural products rice, pulses and

oil seem to be the major items. All major 1ninerals dominate

1 7 See, Kar, G.C. (1989), p. 118.

18 RBI (1984), Vol. I, Part I, esp. Ch. 9, and Vul. II, Fart III, pp. 135-6. Also, see, Government of India (1985b).

175

the. export b~sket.t9 Again, a wide range of forest produce,

including timber, bidi leaves and hides, occupy a large share in

the export basket. The semi-processed and manufactured goods, with

Table 5.10

EXports of Principal Commodities from Orissa: 1959-88 (in '000 units)

Primary Products llgricultural produce: 1. Gram & products 2. other pulses 3. Rice in husk 4. Rice not in husk 5. Groundnut 6. Til or Gingelly

Minerals: 1. Coal & Coke 2. Lime & Limestone 3. Manganese ore 4. Iroo ore

Forest Produce: 1. Hides, raw 2. Bones 3. Lac & shellac 4. Bidi leaves 5. Teak 6. Other timber

Seni. Processed Goods 1. Pucca bales 2. Dyes & tans 3. Oilcakes excl. castor

Jfanufactured Goods 1. Bricks 2. Cement 3. Glass 4. Gunny bags & cloth 5. Iron & Steel strls.

Year> 1959/63

1954 361

7366 9357

76 174

29178 39813 6923

230 13 9

22 11889

1687 58 93

3153 11134

371 105

11324

1964/68

1417 197 203

6442 20

131

27472 72720 11452

118 29 2

23 9077

967 18

183

4678 8649 317 69

35736

1969/73

1425 167 15

6530 30

162

13612 52988 48322

153 53 5

53 8166

1158 84

412

6708 24264

185 102

48741

1974/78

1431 112 24

1954 32

240

30484 49586 10203 47572

143 83 7

167 14

9240

702 60

1316

7512 22419

181 121

56222

1979/83

1186 151 55

927 24

387

48292 52318 8319

214539

129 65 8

612 12

10052

242 129

2019

6646 19337

137 217

48614

1984/86

744 31 3

1756 19

294

152592 57749 8697

280491

150 22 3

526 22

4314

98 77

1025

5366 15344

99 209

51270

Source : Government of India, Accotmts Relating to the Inland (Rail and River-Borne) Trade of India. Calcutta: Department of Ccmnercial Intelligence and Statistics. Various years. Govemnent of India, Interstate Movements/Flows of Goods by Rail and River. Calcutta:

19

Directorate General of Commercial Intelligence and Statistics. Various years.

It must be noted that, though not covered here, a number of important minerals such as chromite, dolomite, graphite, china clay, etc., are exported in large quantities from Orissa.

176

the ex~eption of cement and iron and steel structurals, exported

arE"' obv:i ou!=l1 y J ow valued items and reflect the poor and 1 ess

divArAi.fied industrial structure.

For t.he same period, when we take into account the i t.ems

imported, the high dependence on manufactured goods from outside

is evident. (Table 5.11} Importantly, most of the :items include

common articles of consumption including salt, sugar, gur and

kerosene. The other manufactured goods include iron and steel

!=ltructurals and metal products. Import of mineral oil has grown

substantially between 1974/78 and 1984/88, about. seven times. Of

the agri.~ul tural produce, wheat, rape and· mustard are the major

import items. This again points to the low capacity to import and

the lnw level of consumption.

1'able 5.ll

Imnort~ of Princ:inal C'.onmod:i ties into Orissa: 1 <)59 - 1988 (in '000 un:its)

Year> 1.959/63 19h4/fi8 1969/7.3 1974/78 1979/83 1984/88

Pr.imatv Products 1. 'IJheat ?. • mteat f1 our 3. Rflpe fv Mustard 4. 1'obacco, raw 5. Indian t.int

Seni -Proces..~ C..o:xls 1. Ind. Cotton Twist & Yarn

Manufactured Goods 1. Machinery & F..quipnents 2. Meta 1 product~ 3. Tron fv Steel ~trls. 4. Min. Oil (excl. Ker.) 5. Oi 1 , 'K'f'ro~ene 6. Mustard Oj] 7. Salt 8. S11gar (exd. Khandsar:i) 9. Gur etc. 10. Molasses etc.

Source: Salllf! as above.

2354 441

47 150

189

11140

2759

4561 1107

411 248

4457 84?.6 142 40?. 1.01 187 122 140 288 389

10?. 37

9966 7314

2189 3210

4771 7?.01 1353 1 ?.8.1

264 435 179 ?.10

8314 1.1448 9886 Gl 93 35

30~ 401 570 93 45 13

430 501 58

7 9 12

43 1.68 197 437 144(-i 788

l5hl9 1.5935 16628 3111 10440 20940 2890 4695 fi834

33 131 317 9040 8839 770() 3.194 4807 15335 754 530 280 589 617 543

177

It is worth mentioning here that an important study on inter-

State commodity flows2o, has concluded that the distribution of net

positive outflow is "highly" skewed, wherein the richer states have

lower outflows than that of the poorer ones. It observes that

Orissa is one of the three States (the rest two being Hadhya

Pradesh and Bihar) in India with the highest trade surplus. This

State has "not only positive net outflow, but a substantial part

of (its) product is being transported to rich States". 21 In all

probability, the ndt outflow of primary commodities has had

debilitating effect on the economy's progress.

Conclusion

In this Chapter we have presented various aspects of Orissa's

economy. The most striking observation is that the economy has

remained practically stagnant in terms of the rnove111ent of sectoral

shares. Agriculture, the predominant economic activity has remained

basically monocrop with the productivity of rice showing hardly any

improvement overtime. Further, till the mid-eighties the cropping

pattern has not shown any diversification, the major drag being

recognised as lack of adequate irrigation facilities. Further, we

have pointed to the large scale outflow of rich natural resources

mostly in the raw form. All this h~s weakened the State's resource

generation capacity and depressed the productive forces within.

20 • Hehta, R. (1983). This study, the first of its kind, uses data produced by the Rail India Technical and Economic Services Ltd (RITES) iurvey of 1978-79, covering 44 major commodities for 298 regions by rail, road and coastal shipping and provides values of the items traded.

2 1 For details see, ibid., p. 114.

178