December 5, 2021

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Odisha approves Rs 1.5L crore investment in six months, mulls amendment to IPR-2015

While 3,300 acre has been handed over to IOCL for the refinery, IDCO would acquire around 7,400 acre for industrial development in the PCPIR.

Odisha is contemplating further amendment to its existing industrial policy resolution (IPR)-2015 to diversify investments in the state beyond mining- and mineral-based industry. The state’s IPR- 2015 was mainly targeted towards investments in ancillary and down stream to metals industries, besides food processing, ESDM (electronic system design and manufacturing skill), IT, ITes and tourism industries.

The proposed amendments seek to focus on new age industries, linked with the Centre’s PLI scheme including electric vehicles, (EVs), EV component and green energy equipment, Hemant Sharma, state industry secretary and also the chairman of Industrial Promotion and Investment Council of Odisha (IPICOL) told FE. He said there are investment proposals pouring in to the new-age sector, though he didn’t want to divulge any details citing no-disclosure agreements.

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Around 60 industrial projects across sectors have been approved by the state’s single window in the first six months of the current fiscal with proposed investment valued at above Rs 1,52,763.53 crore, Sharma said.

The state has always been able to attract investment in traditional manufacturing sectors such as iron and steel, aluminium, cement, thermal power and others, where it had inherent advantages with mineral reserves, contributing around 22-24% of the state’s own revenue. Though the service sector is the largest contributor to Odisha’s gross value addition (GVA) at 40.51% as of FY20, the state’s fortunes are majorly linked to metallurgical industries with FDI inflow worth $16.58 million between April and November last year. This was 27% higher than the preceeding year, he said, adding the government’s present decision to attract investments in new-age industries would primarily focus on manufacturing white goods and its components while also looking at large-scale electronic, telecom equipment, auto and its components, pharmaceuticals and bulk drug manufacturing.

The state lacked an ecosystem to provide support to industries beyond metallurgy and its down stream, but the proposed petroleum, chemical and petrochemical investment region (PCPIR) at Paradeep on 284.15 sq km (70,214 acre) across Jagatsinghpur and Kendrapara districts would create an ecosystem for white goods and other allied industries to thrive.

The hub is expected to attract investments to the tune of Rs 2.74 lakh crore with Indian Oil Corporation (IOCL) as the anchor tenant. IOCL, besides its Rs 33,000-crore 15-million tonne per annum oil refinery, would set up a 700-kilo tonne per annum polypropylene unit at an investment of Rs 3150 crore. Industrial Development Corporation of Odisha (IDCO) has formed an SPV, Paradeep Investment Region Development, to develop the required infrastructure for the project. While 3,300 acre has been handed over to IOCL for the refinery, IDCO would acquire around 7,400 acre for industrial development in the PCPIR.

IOCL has also proposed to set up petrochemical cracker units within the PCPIR region. A Mono Ethylene Glycol (MEG) unit, a part of IOCL’s petrochemical complex, would produce raw materials for polyethelyne terephthalate (PET), polyester staple fibre (PSF) and polyester spun yarn (PSY). The TCG Group that has announced a Rs 30,000-crore investment to set up a petrochemical complex, has at present filed for 2,300 acre of land acquisition. All such projects augurs for the backward integration of the new-age industries Odisha was currently looking at, Sharma said. The MEG project would mainly support IOCL’s yarn unit at the textile park on 60 acre in Bhadrak. An investment of Rs 1,971 crore has been planned for the textile park, expected to become operational by 2024.

Earlier, in May this year, the state made an amendment to its IPR-2015 in terms of including medical oxygen refilling and manufacturing its container within the priority list. The proposed amendment would offer new incentive package with special focus on improved capital investment subsidy. The policy would incentivise investors based on the size of investment made and the number of direct employments generated through the investment.

The state’s proposed 100-km Odisha Econmic Corridor ( OEC) on either side of NH-16, covering 19 districts, would provide the passage for logistics. The corridor would connect the mineral-rich hinterland having the state’s 86% of coal reserves, 82% of iron ore reserves, 70% of bauxite reserves and 40% of natural gas reserves. OEC has the potential to generate over Rs 4 lakh crore of manufacturing output, Rs 81,000 crore of investment and an additional 8 lakh direct jobs by 2025, Sharma said.

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