CAN TAMILNADU BE A ROLE MODEL FOR ODISHA’S INDUSTRIALIZATION?

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  Odisha state doesnot manufacture any engineering equipments or machineries used in mining, steel, Aluminum, power plant or a chemical industry. As a result most of the investment which Odisha attracts is being utilized in other states.

 

 

For the past about two decades Odisha has been attracting industrial investments mainly from sectors like mining and metal production, petroleum and heavy chemicals.Odisha’s strength is in its natural resources like coal, iron ore, bauxite, chromite, titanium mineral etc. Odisha Govt. has been focusing on setting up of steel, aluminium, stainless steel plants among others.At the same time the state is now laying emphasis on the down stream development of these metals. Today the state is a leading producer of steel, stainless steel and aluminum metal. To supplement the transport logistics, various infrastructure facilities like new railway lines, highways, ports and inland water transport etc are being implemented. The state level single window clearance and high level clearance authority’s approval of industrial projects reveal that most of the projects pertain to mining of iron ore, its beneficiation, slurry transport, pellet making, pigiron and steel manufacture.Besides a few biofuel plants, cement plants, petrochemical units,a few hospitality and tourism, projects have been approved many of which are yet to be grounded.It is noticed that out of the huge investment proposals which are grounded in the mining and metal sector, it is only a small percentage of the investment is utilized within the state. Some items like structural steel, refractories cement, bricks and boulders available in Odisha are purchased by the mega industries. Also a small amount is spent within the state towards unskilled labour payment.

 

A mining, metal production, power plant or a heavy chemical / petroleum based industry uses machineries and equipments  like dumpers, tippers, loaders, cranes, bulldozers, excavators, jaw crushers, vibromills, ball mills, rod mills, magnetic and electrostatic separators, spiral concentrators, conveyor belts, elevators, coke oven plants, Blast furnaces, steel melting furnaces, ladles, cold and hot rolling mills, conveyor systems, extrusion plants, oxygen plants, generators, boilers, Turbines, heat exchangers, cooling towers etc. Most of the industries irrespective of the process involved use general machines like Air compressors, Instrumentation and electronics control  system, Air conditioing system, cooling towers, reactors, rotary driers, water pumps, chemical process pumps, submersible pumps, electrical motors, pressure vessels, piping, valves, v-belts, pulleys, bearings, industrial and decorative paints, gear boxes, lubricants, exhaust blowers, electrical lighting system, transformers, capacitors, electrical starters etc.

Sadly none of the above equipments are manufactured in Odisha. Hence industries setting up their units in Odisha procure most of the above engineering machineries and equipments from outside the state where not only employment is generated but also those states get sales tax and other benefits. On a rough estimate about 95% of the committed investment from our state is utilized outside our state. States like Maharastra, Gujarat, Karnataka,TamilNadu, Telengana are greatly benefitted in the mega industries which are set up in Odisha. Consultancy services for preparation of feasibility and detailed project report, detailed engineering, construction supervision, 3rd party inspection, banking and financial services, Audit and Taxation services etcare also undertaken by firms from outside the state.

Hence Odisha’s claim of attracting huge investment is a misnomer. Even common items like rubber gaskets, flanges, nuts and bolts, welding electrodes, fluxes, various industrial chemicals, electrical sockets, switches, wires, etc. are bought from neighboring Kolkata, Raipur, Visakhapatnam, Jamshedpur and other cities adjoining our industrial towns.

There is no doubt that a mega steel or Aluminum plant after commissioning will generate direct & indirect employment as well as Tax revenue for the state. But at the same time our mineral resources will also slowly deplete. Hence to get maximum benefit from the initial capital investment, our state should aim to get a major chunk of the committed project cost utilized or invested within our state. Though it is not possible to manufacture all the major industrial items in our state but certainly some common and general purpose equipments and machineries can be manufactured in our state with proactive support of the state Govt.                                                                             Despite having  vast mineral resources alongwithwater resources, forest coverage and 480 km of coast line, the state’s GDP is very low at about Rs. 6 lakh crore (21 – 22) and the state’s rank is 16th in the country. On the contrary the state of Tamil Nadu does not have mines and minerals & other resources like Odisha has.The GDP of TN (2022-23) is estimated at Rs. 24 Lakh crores and is the 2nd wealthiest state in India. It is the most industrialized state in India and over 60% of the state is urbanized. The total annual export from TN isRs. 3.75 lakhs crores against Rs. 75,000 Crores of Odisha mostly from export of minerals & ores. Most of the industries in TN consume less water and power,use less land & generate less pollution. Also TN does not face any major land acquisition and eviction problems. The state has units to manufacture Boilers, wind energy turbines, textile machineries, pumps, compressors electric motors, Aerospace and defenceequipments, News Print papers, watches, Rubber components,Textiles, garments, Automobile cars and buses, Defence tanks, Railway coaches tractors, earth moving and construction machineries like Bull dozer, dumpers, tippers and cranes, motor bikes, cycles, Railway engines, gear boxes, electronics and Telecom equipments, pharmaceuticals, medical devices, leather products, tyres, foot wears, leather chemicals, toys, e-vehicles, etc. These industries generate huge revenue for the state and provide large scale employment. Their quality of education and medical facilities are far superior to that of Odisha. TN has more than 500 engineering colleges and more than 60 medical colleges with 9200 + MBBS seats, besides having several national level institutes and research organizations.

Having planned for a massive growth in mining and metallurgical sector, it is time for Odisha to think beyond manufacture of steel and Aluminium metal. It will be appropriate for our Govt. to follow the Tamilnadu model of industrialization which has a proven record of success. No matter whichever party holds power in Tamil Nadu, the rapid industrialization continues unabated. Since our state doesnot have any manufacturing units of Engineering products, our Govt. should invite manufacturers like Siemens, L & T,Kirloskers, Voltas, BHEL, BEL, ABB, FAG, SKF, Berger paints, Shalimar Paints, Asian Paints, Grasim paints, Dunlop, good year, Fenner, Best and Crompton, Schneider, Alstom, Crompton Greaves, ThyssenKrupp, Thermax, Exide, Eveready and several other reputed companies for setting up their manufacturing units in Odisha. Besides the above companies, our Govt. should focus on setting up of non mineral based industries like automobile units,defenceequipments, railway components, aeronautical and aerospace components,semiconductor manufacture and data centers, sea going and water transport Vessels like cargo ships, Tugs, Barges, fishing trawlers, pharmaceuticals, medical appliances, electronic components etc. Making policies for various production and service activities is one part and bringing investments and grounding them is another part which needs vigorous monitoring by our Govt.

Our Hon’ble chief minister has been Projecting Odisha as the manufacturing hub of the east whichis rather misleading. Only when some of the above suggested equipments& machineries are manufactured in our state, his dream will translate into reality.

 

 

 

 

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