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State of Economy: A Macro View
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STATE OF ECONOMY: A MACRO VIEW
CHAPTER
1
Abstract
The year 2025-26 is expected to be yield promising results from macro-economic standpoint. Growth is higher than past long-term average. Inflation is largely controlled. State is improving its share in India’s GDP. Per-capita income gap with national average has gone down.
The State economy is nearly ₹ 10 lakh crores and grew by 7.9 per cent in 2025-26 in real terms. Growth was broad-based i.e., all major sectors (agriculture, industry and services) grew rapidly. Agriculture, which employs 48.6 per cent of total workforce, grew by 5.3 per cent. Industry has been driving Odisha’s overall growth over a long period. The sector contributes 41.3 per cent of State Economy and grew by 6.4 per cent. Robust growth in this sector is critical for the State to progress on the productivity ladder. Service sector is second largest major sector and was the fastest growing sector with growth of 9.3 per cent. The sector is expected to remain one of the fastest growing sector. As against the industry sector, the service sector is less impacted by commodity price fluctuations. The sector is also mix of diverse sub-sectors which are subject to divergent growth drivers which balances each other. The sector has been one of the most stable source of growth in the past. State’s focus on attracting companies in new-age sectors such as GCC, AI-led services would enhance contribution of modern services which are high on skill and technological intensity.
On demand side, the State is not just experiencing faster growth in household consumption but also compositional change towards high value commodities and services. As an example, share of processed food has gone up from 7.5 per cent to 10.3 per cent in rural areas between 2011-12 and 2023-24. Share of milk, fruits, spices in household consumption basket has increased both in rural and urban areas. This bodes well to attract investors to make in Odisha for Odisha.
With intensive deliberations and collaboration amongst line departments, intellectuals, and wider community, the State formulated Vision 2036 and 2047. The vision is developed by keeping in perspective State’s strengths and the opportunities it can tap on in next few decades. Various long-term targets supplemented with shorter-term milestones are expected to accelerate growth trajectory in the coming months.
1.1 INTRODUCTION
1.1.1 India remains one of the fastest-growing economies in the world, outpacing both advanced economies (AEs) and the emerging market and developing economies (EMDEs). As per IMF, India’s real GDP is projected to grow at 6.4 per cent in 2026, significantly above the growth rates witnessed in AEs (1.8 per cent) and EMDEs (4.2 per cent). This growth is supported by economic performance of various states across the country. Odisha is one such State, contributing nearly 3 per cent to India’s GDP.
1.1.2 Odisha is expected to grow at 7.9 per cent in 2025-26, higher than long-term average of 6.6 per cent. Odisha which witnessed high inflation in 2024-25 has registered low inflation of 0.1 per cent in 2025-26 (April to Dec) supporting people with greater purchasing power.
1.1.3 By 2025-26, Odisha’s economy is projected to reach nearly ₹ 10 trillion, raising its contribution to India’s GDP from 2.73 percent in 2023-24 to 2.77 percent in 2025-26. This is due to multiple factors. First, Odisha is diversifying its growth propellers from mineral focused sectors to more value-added areas such as professional services, financial services, tourism and value-added manufacturing. Second, strong kharif season has given boost to crop sector supplemented by resilience in allied sectors such as fisheries and livestock. Third, manufacturing sector has rebounded in 2025-26 after being hit in 2022-23 due to external sector developments particularly export slowdown, commodity price fluctuations, supply chain disruptions and demand slump.
Figure 1.1: Gross State Domestic Product, Odisha, 2023-24 to 2025-26
| Year | GSDP (₹ Lakh Crores) | Share in India’s GDP (%) |
|---|---|---|
| 2023-24 (2nd RE) | 8.2 | 2.73% |
| 2024-25 (1st RE) | 9.0 | 2.73% |
| 2025-26 (A) | 9.9 | 2.77% |
Source: Directorate of Economics and Statistics, Government of Odisha, National Accounts Statistics, MoSPI, Government of India
1.1.4 The State is building growth potential across sectors. This includes (i) leveraging Artificial Intelligence led productivity improvement, (ii) fostering agglomeration benefits through integrated development of Bhubaneswar, Cuttack, Puri and Paradip Economic Region (BCPPER), (iii) attracting leading educational institutions to boost organic talent and knowledge-based economy and (iv) diversifying manufacturing landscape towards high-tech and value-added sectors. Government of India in the Budget 2026-27 has also announced series of measures for the State of Odisha particularly development of national waterway-5 and rare earth mineral corridor. This is expected to boost transport connectivity, bring down logistics cost in the State and build reliable supply chain for new and emerging sectors such as semi-conductors/advanced electronics.
1.2 ECONOMIC GROWTH AND SECTORAL DYNAMICS
1.2.1 The State is estimated to grow at an annual rate of 7.9 per cent in 2025-26 higher than 7.2 per cent in the preceding year. It is substantially higher than long-term average of 6.6 per cent (2014-15 to 2023-24). The State intends to maintain the momentum of growing at rate higher than long-term average through targeted interventions. Comparatively, Odisha has also grown at rate higher than reported at the national level. In 2025-26, All-India growth is expected to be 7.4 per cent which is nearly 0.5 percentage point lower. Odisha is targeting to grow at higher than this rate given the expected return to capital, adequate resource envelope, and targeted policy interventions to address market failures.
Figure 1.2: GSDP growth at constant prices, Odisha, in per cent
| Period | GSDP Growth (%) |
|---|---|
| 10 Year Average (2014-15 to 2023-24) | 6.6 |
| 2024-25 | 7.2 |
| 2025-26 (AE) | 7.9 |
Source: Directorate of Economics and Statistics, Government of Odisha, National Accounts Division, MoSPI, Government of India
1.2.2 Nearly 41.3 per cent of State Economy is contributed by Industry sector followed by 39.1 per cent through Service sector and 19.6 per cent via Agriculture and allied sector. Comparatively, contribution of services sector is more intense at All-India level. This reflects Odisha’s robust manufacturing ecosystem and growth experienced in the past.
Figure 1.3: Odisha and India GSVA composition at current prices, 2025-26
| State/Country | Industry (%) | Services (%) | Agriculture, Forestry and Fishing (%) |
|---|---|---|---|
| Odisha, 2025-26 | 41.3 | 39.1 | 19.6 |
| India, 2025-26 | 26.8 | 56.4 | 16.8 |
Source: Directorate of Economics and Statistics, Government of Odisha, National Accounts Division, MoSPI, Government of India
1.2.3 In comparison to other major states too, Odisha has higher share of Industry sector at 41 per cent in 2024-25. The State is taking efforts to further give boost to Service sector which is currently nearly 39 per cent as against 64 per cent in Maharashtra, 68 per cent in Karnataka, 54 per cent in Tamil Nadu and 67 per cent in Telangana.
Figure 1.4: GSVA composition of major states, 2024-25, in per cent
| State | Agriculture, forestry and fishing (%) | Industry (%) | Services (%) |
|---|---|---|---|
| Madhya Pradesh | 41 | 22 | 37 |
| Andhra Pradesh | 35 | 23 | 42 |
| Rajasthan | 27 | 27 | 46 |
| Uttar Pradesh | 26 | 27 | 47 |
| Punjab | 23 | 28 | 48 |
| Bihar | 22 | 24 | 54 |
| West Bengal | 20 | 22 | 58 |
| Chhattisgarh | 20 | 43 | 36 |
| Odisha | 20 | 41 | 39 |
| Haryana | 18 | 28 | 54 |
| Jharkhand | 16 | 39 | 45 |
| Gujarat | 17 | 48 | 36 |
| Telangana | 14 | 19 | 67 |
| Tamil Nadu | 13 | 33 | 54 |
| Karnataka | 12 | 20 | 68 |
| Maharashtra | 12 | 24 | 64 |
| Kerala | 9 | 24 | 67 |
Note: GSVA distribution for Gujarat pertains to 2023-24 since data for 2024-25 is unavailable on the MoSPI website.
Source: National Accounts Division, MoSPI, Government of India.
1.2.4 Rapid growth across sectors in 2025-26 reflects that all engines of growth are fuelling Odisha’s growth trajectory. Agriculture sector employs around 49 per cent of workforce and thus critical for inclusive growth. Similarly, Industrial sector performance shows State’s ability to leverage its resource strength and move deeper into value chain. Service sector provides more stable source of growth given the inherent diversity in the sector. It is interesting to note that modern services such as financial services, professional services and tourism have particularly grown at higher rate in 2025-26.
1.2.5 Odisha experienced supportive kharif season in 2025-26 with foodgrain production increasing by 6 per cent as against nearly 5 per cent growth in the preceding year. Odisha’s Industry sector is dependent influenced by commodity price movement. Higher prices for metals and minerals strengthen margins in the sector. In 2025, index of prices for metals and minerals prices went up by 2.9 per cent slightly higher than 2.6 per cent in 2024. As per World Bank, metals and minerals price index is expected to move up by 0.3 per cent only in 2026 and 1.7 per cent in 2027. Therefore, enhancing competitiveness in the sector would be instrumental to support medium-term growth.
Figure 1.5: Odisha and India sector-wise growth, 2025-26, in per cent
| Sector | India (%) | Odisha (%) |
|---|---|---|
| Agriculture, Forestry and Fishing | 3.1 | 5.3 |
| Industry | 6.2 | 6.4 |
| Services | 9.1 | 9.3 |
| Gross State Domestic Product | 7.4 | 7.9 |
Source: Directorate of Economics and Statistics, Government of Odisha, National Accounts Division, MoSPI, Government of India.
1.2.6 Services sector in Odisha is one of the most stable sectors. In the last five years, the sector has consistently grown at rate higher than 8 per cent. This is because sector is highly diverse ranging from traditional services such as trade and repair, transport and communication to modern services such as financial services, real estate and professional and business services. National initiatives such as Jan Dhan Yojana, Digital Public Infrastructure has led to nearly universal access to basic financial services. This is yielding results with rapid growth in financial services sector. Odisha’s current credit penetration is limited both at firm and household level.
There is scope for further expansion of financial services. Similarly, with the push towards attracting global capability centres and other IT companies, skilling initiatives, professional services would also experience rapid growth.
1.3 PER-CAPITA INCOME
1.3.1 Per capita income (PCI), at current prices, increased by 9.2 per cent from ₹1.71 lakh in 2024-25 to ₹1.87 lakh in 2025-26. Comparatively, at All-India level, growth was 6.9 per cent. Odisha is rapidly closing the gap with India’s per-capita income. In 2023-24, the gap was 18 per cent which has been reduced to 15 per cent in 2025-26. This steady rise in PCI has contributed to tangible improvements in living standards in Odisha, reflected in improved socio-economic outcomes including greater ownership of durable assets, better access to education and healthcare, and overall socio-economic progress.
Figure 1.6: Per capita income at current prices, Odisha and India, in ₹
| Year | Odisha (₹) | India (₹) | Gap (%) |
|---|---|---|---|
| 2023-24 (2nd RE) | 155125 | 188892 | 18% |
| 2024-25 (1st RE) | 171025 | 205324 | 17% |
| 2025-26 (A) | 186761 | 219575 | 15% |
Source: Directorate of Economics and Statistics, Government of Odisha, National Accounts Statistics, MoSPI, Government of India
1.3.2 Compared to other major states, Odisha stands at 11th place in per-capita income rank in 2023-24. It shows the immense potential for further enhancement of income levels in the State. Given the progress made recently, it is expected that Odisha would be able to improve its ranking in the coming years.
Figure 1.7: Per-capita income state wise at current prices, 2023-24, in ₹
| State | Per-capita income (₹) |
|---|---|
| Telangana | 347714 |
| Karnataka | 339813 |
| Haryana | 319363 |
| Tamil Nadu | 313329 |
| Gujarat | 300957 |
| Kerala | 281269 |
| Maharashtra | 278681 |
| Andhra Pradesh | 237951 |
| Punjab | 205374 |
| Rajasthan | 166647 |
| Odisha | 155125 |
| West Bengal | 149515 |
| Chhattisgarh | 148922 |
| Madhya Pradesh | 139713 |
| Jharkhand | 106529 |
| Uttar Pradesh | 97364 |
| Bihar | 62201 |
Note: Per capita incomes are reported for 2023-24 since data for 2024-25 is unavailable on the MoSPI website.
Source: Directorate of Economics and Statistics, Government of Odisha, National Income Accounts, MoSPI, Government of India
Key transformative initiatives envisaged under Vision 2036 & 2047
With GSDP approaching the ₹10 trillion mark and a projected growth rate of 7.9 per cent, sustaining this momentum becomes essential. Vision 2036 & 2047 identifies some key initiatives which can drive economic growth, enhance productivity, and create multiplier effects across the economy.
- 01** Bhubaneswar-Cuttack-Puri-Paradip Economic (BCPPER) - Icon: Stylized human figures.
- 02** Liveable Cities - Icon: Buildings.
- 03** Puri Airport & Aerotropolis - Icon: Airplane and terminal.
- 04** Mahanadi Waterfront - Icon: Boat and buildings.
- 05** Model Village Mission - Icon: House with a star.
- 06** Irrigation Expansion - Icon: Water dam.
- 07** Smart Farm Markets - Icon: Market stall.
- 08** Odisha Shrimp Mission & Deep-Sea Fishing Harbours - Icon: Ship.
- 09** Odisha Manufacturing Mission - Icon: Factory.
- 10** Evolution of AI Ecosystem - Icon: AI logo.
Bhubaneswar-Cuttack-Puri-Paradip Economic Region (BCPPER)
fosters urban agglomeration, boosting productivity, innovation through better connectivity of people and businesses
Liveable Cities could support growing urbanisation, enhance access to amenities, education, and healthcare, drive economic empowerment to emerge as resilient, futuristic cities.
Puri Aerotropolis as a multimodal airport city is likely to boost connectivity, facilitate passenger and cargo movement, drive aviation-oriented businesses, create employment.
Mahanadi Waterfront
has the potential to boost tourism revenue, create jobs, enhance liveability, serve as a green lung, and showcase Odisha’s rich maritime heritage, crafts and traditions.
Model Village Mission could serve as blueprint for rural transformation boosting quality of life, stimulating local enterprises, and driving balanced economic growth, as over 80% resides in rural areas.
Irrigation Expansion can potentially enhance coverage (for relevant areas) from the current approx. 50%, ensuring water security, strengthening farm productivity, and uplifting rural livelihoods.
Smart Farm Markets hold promise to reduce post-harvest losses, enable transparent price discovery, and create rural enterprise hubs, boosting farmer income, agricultural GVA.
Odisha Shrimp Mission & Deep-sea Fishing Harbours could provide sustainable livelihoods including for coastal communities, and position Odisha as a leading seafood producer and export hub.
Odisha Manufacturing Mission could attract industrial investments by offering ready-to-operate infrastructure in strategically located industrial parks for priority sectors.
Evolution of the AI Ecosystem is likely to drive growth across sectors such as agriculture, healthcare, disaster management, enabling data-driven development.
1.4 EMPLOYMENT
1.4.1 As mechanisation, enterprise-focused AI tools continue to reshape industries, it is important to consider how employment patterns are evolving. Odisha is currently reaping its demographic dividend, and even over the next decade it is expected to have nearly 70 per cent of its population within working age category. Understanding the current employment landscape will help shape policies that enable the workforce to build skills, adapt and benefit from emerging economic and technological opportunities.
1.4.2 In 2024, Odisha had a population of 3.56 core individuals aged 15 and above, of which 2.29 crore were part of the labour force, either employed or actively seeking work. Of these, 2.22 crore were employed. A closer look at the composition of employment reveals that self-employment dominates the labour market, with 1.37 crore individuals engaged in self-employment activities. The remaining workforce comprises regular salaried workers (0.32 crore) and casual labourers (0.53 crore).
Figure 1.8: Odisha’s employment landscape, 2024
graph TD; A[15+ Age Population
3.56 Cr] -.-> B[Labour force
2.29 Cr]; B -.-> C[Employed
2.22 Cr]; B -.-> D[Unemployed
0.08 Cr]; C -.-> E[Jobs
0.85 Cr]; C -.-> F[Self-employment
1.37 Cr]; E -.-> G[Casual labour
0.53 Cr]; E -.-> H[Regular salaried
0.32 Cr];
The flowchart illustrates the employment landscape in Odisha for 2024. It begins with the 15+ age population at 3.56 Cr, which leads to the labour force at 2.29 Cr. The labour force is divided into employed (2.22 Cr) and unemployed (0.08 Cr) categories. The employed category is further broken down into jobs (0.85 Cr) and self-employment (1.37 Cr). Jobs are further categorized into casual labour (0.53 Cr) and regular salaried (0.32 Cr).
| Category | Value (Cr) |
|---|---|
| 15+ Age Population | 3.56 |
| Labour force | 2.29 |
| Employed | 2.22 |
| Unemployed | 0.08 |
| Jobs | 0.85 |
| Self-employment | 1.37 |
| Casual labour | 0.53 |
| Regular salaried | 0.32 |
Source: Periodic Labor Force Survey 2024, MoSPI, Government of India
1.4.3 Odisha has shown improvement in key employment indicators, particularly in terms of labour force participation rate and worker population ratio. Between 2022 and 2024, the State recorded a significant increase in its labour force participation rate (LFPR), rising from 58.1 per cent to 64.5 per cent, an increase of around 6.5 percentage point. Over the same period, the national LFPR increased from 56.1 per cent to 59.6 per cent, reflecting a rise of 3.5 percentage point. The State has therefore outperformed the national average, achieving substantially higher levels of labour force participation.
1.4.4 This improvement is evident across gender categories as well. The female labour force participation rate (FLFPR) in Odisha increased from 37.6 per cent in 2022 to 48.7 per cent in 2024, surpassing the national average of 40.3 per cent. Furthermore, Odisha recorded one of the highest FLFPRs in the country at 48.7 per cent. This rise in female participation has contributed to narrowing of gender gap in the labour market from 41 per cent to 32.9 per cent in 2024, enabling the State to enhance women’s engagement in employment.
Figure 1.9: Labour Force Participation Rate, Odisha and India, in per cent
| Category | Year | Odisha (%) | India (%) |
|---|---|---|---|
| Labour Force Participation Rate | 2022 | 58.1 | 56.1 |
| 2024 | 64.5 | 59.6 | |
| Female Labour Force Participation Rate | 2022 | 37.6 | 33.9 |
| 2024 | 48.7 | 40.3 |
Source: Periodic Labor Force Survey 2024, MoSPI, Government of India
1.4.5 Workforce Population Ratio (WPR) in the State has shown a significant improvement, rising from 55.1 per cent to 62.5 per cent, and now exceeds the national average of 57.7 per cent. As the State is currently experiencing a demographic dividend, with a substantial proportion of its population in the working-age group, this trend reflects an encouraging development. In addition, the unemployment rate declined to 3.1 per cent in 2024 from 5.1 per cent in 2022, placing the State broadly in line with national levels.
Figure 1.10: Workforce Population Ratio (WPR), Odisha and India, in per cent
| Year | Odisha (%) | India (%) |
|---|---|---|
| 2022 | 55.1 | 54.1 |
| 2024 | 62.5 | 57.7 |
Source: Periodic Labor Force Survey 2024, MoSPI, Government of India
1.4.6 The size of labour force alone is not the primary driver of economic growth; equally important are the quality of employment and the extent of social and income security it offers. Nearly half of the workforce is concentrated in agriculture (48.6 per cent), followed by industry (27.5 per cent) and services (23.9 per cent). Moreover, self-employment accounts for a dominant share of the workforce (62.7 per cent), followed by casual employment (24.1 per cent), whereas regular salaried employment constitutes about 13.2 per cent.
Table 1.1: Key Employment Indicators, 2022 and 2024
| Indicator | 2022 | 2024 |
|---|---|---|
| Total Workforce (in crores), 15+ age | 1.89 | 2.22 |
| Workforce distribution by sector (%) | ||
| Agriculture | 46.7 | 48.6 |
| Industry | 25.7 | 27.5 |
| Services | 27.6 | 23.9 |
| Workforce distribution by occupation type (%) | ||
| Self-employed | 61.1 | 62.7 |
| Regular Salaried | 14.5 | 13.2 |
| Casual | 24.4 | 24.1 |
Source: Periodic Labor Force Survey, 2022, 2024, MoSPI, Government of India.
1.5 CONSUMPTION EXPENDITURE
1.5.1 Household Consumption Expenditure Survey (HCES) provides estimates of monthly per capita consumption expenditure (MPCE) for both rural and urban population, covering a broad spectrum of goods and services, including essential items like food. Analysis of these expenditure patterns shows changes in consumption behaviour, and evolving living standards.
1.5.2 Odisha has experienced robust growth in household consumption. The MPCE registered an increase from ₹1,142 in 2011-121 to ₹3,759 in 2023-24, reflecting a CAGR of 10.4 per cent. In rural areas, MPCE increased from ₹1,003 in 2011-12 to ₹3,357 in 2023-24 with a CAGR of 10.6 per cent. Meanwhile, urban MPCE rose from ₹1,941 to ₹5,825 over the same period with a CAGR of 9.6 per cent. Both rural and urban growth rates exceed the national averages of 9.2 per cent and 8.5 per cent, respectively.
Figure 1.11: Monthly Per Capita Consumption Expenditure, in ₹
| Area | Year | Odisha (₹) | India (₹) |
|---|---|---|---|
| Rural | 2011-12 | 1,003 | 1,430 |
| 2023-24 | 3,357 | 4,122 | |
| Urban | 2011-12 | 1,941 | 2,630 |
| 2023-24 | 5,825 | 6,996 |
Source: Household Consumption Expenditure Survey (HCES) 2023-24, NSS 68th Type 2 round 2011-12, MoSPI, Government of India
1The NSS 2011-12 Type 2 estimate have been used to compare against the HCES 2023-24 data, as both have comparable reference periods.
1.5.3 Rural-urban gap is narrowing. In 2011-12, urban MPCE was approximately 1.94 times higher than rural MPCE, and by 2023-24, this ratio declined to 1.74. This is a positive development reflecting balanced development across the State.
1.5.4 The MPCE can be broadly classified into food and non-food components, and examining this composition provides insight into changing consumption behaviours that accompany economic development. Between 2011-12 and 2023-24, there has been a marked shift in consumption patterns in both rural and urban areas, with non food expenditure accounting for a progressively larger share of total per capita consumption expenditure. In rural areas, the share of non food consumption increased from 42.8 per cent in 2011-12 to 51.5 per cent in 2023-24, while in urban areas it rose from 54.6 per cent to 59.3 per cent over the same period. Correspondingly, the share of expenditure on food declined, reflecting rising incomes and changing consumption patterns consistent with Engel’s Law. The Law posits that as income increases, the proportion of expenditure on food falls even if absolute food consumption expenditure may not decline.
Figure 1.12: Composition of Monthly Per Capita Consumption Expenditure, 2011-12 and 2023-24, Odisha, in per cent
| Area | Year | Food (%) | Non-food (%) |
|---|---|---|---|
| Rural | 2011-12 | 57.2% | 42.8% |
| Rural | 2023-24 | 48.5% | 51.5% |
| Urban | 2011-12 | 45.4% | 54.6% |
| Urban | 2023-24 | 40.7% | 59.3% |
Source: Household Consumption Expenditure Survey (HCES) 2023-24, NSS 68th Type 2 round 2011-12, MoSPI, Government of India
1.5.5 The share of per capita consumption expenditure on food declined between 2011-12 and 2023-24. In rural areas, it fell from 57.2 per cent to 48.5 per cent, and in urban areas from 45.4 per cent to 40.7 per cent. Concurrently, there has been a move away from staple cereals towards more diversified, nutrient-rich diets. The share of cereals in food expenditure has nearly halved, while consumption of processed foods, fruits, milk and milk products, and animal-source proteins has increased across both rural and urban areas, although unequally. The nutrient-rich items such as fruits, dairy products, and animal-source proteins now account for 25.6 per cent in rural and 27.2 per cent in urban areas, up from 18.9 per cent and 23.3 per cent respectively. These trends indicate a nutritional transition in Odisha, moving beyond mere caloric sufficiency towards greater dietary diversity and improved nutritional outcomes.
1.5.6 Non-food consumption expenditure includes spending on mainly consumables and services, (such as clothing, transport, health, and education) and durable goods (such as household appliances and vehicles). Between 2011-12 and 2023-24, spending on consumables and services increased in both rural and urban areas. In rural areas, their share in total MPCE rose from 39 per cent to about 47 per cent, suggesting that individuals in rural areas are spending a larger portion of their consumption expenditure on this sub-category. In urban areas, although spending on consumables and services increased in absolute terms, their share remained almost unchanged, rising only slightly from 50.1 per cent to 51.9 per cent. Households in urban areas were already spending a significant share on these items, and the recent increase has merely kept pace with their rising total expenditure.
Table 1.2: Composition of household food expenditure Between 2011-12 and 2023-24, in per cent
| Categories | Rural | Urban | ||
|---|---|---|---|---|
| 2011-12 | 2023-24 | 2011-12 | 2023-24 | |
| Cereal | 29.3 | 15.4 | 23.0 | 12.9 |
| Pulses and Products (including gram) | 5.6 | 5.7 | 4.9 | 4.9 |
| Edible Oil | 5.9 | 5.9 | 5.0 | 4.8 |
| Salt and Sugar | 2.7 | 1.7 | 2.3 | 1.4 |
| Vegetables | 17.8 | 17.0 | 14.3 | 14.2 |
| Egg, Fish and Meat | 10.6 | 12.7 | 10.1 | 9.8 |
| Packaged Processed Food and Beverages | 6.5 | 10.9 | 9.0 | 14.6 |
| Categories | Rural | Urban | ||
|---|---|---|---|---|
| 2011-12 | 2023-24 | 2011-12 | 2023-24 | |
| Served Processed Food | 7.5 | 10.3 | 13.2 | 13.9 |
| Spices | 5.8 | 7.5 | 4.9 | 6.1 |
| Fruits | 3.9 | 6.7 | 5.4 | 7.9 |
| Milk and Milk Products | 4.5 | 6.2 | 7.8 | 9.5 |
Source: Household Consumption Expenditure Survey (HCES) 2023-24, NSS 68th round 2011-12, MoSPI, Government of India
1.5.7 Between 2011-12 and 2023-24, spending pattern shows a shift from essential services, such as energy, healthcare, and education, toward lifestyle articles and services, including personal care, entertainment, consumer services, clothing, and footwear. In rural areas, the share of essential services in total MPCE declined from 19 per cent to 17.1 per cent, while spending on lifestyle and personal wellbeing rose from 12.7 per cent to 15.8 per cent, narrowing the gap between essential and aspirational spending. Similarly, in urban areas, the essential services spending fell from 17.7 per cent to 14.4 per cent, while the lifestyle expenditure increased from 14.2 per cent to 16.8 per cent. As public provision of energy, healthcare, and education services has expanded and rising individual incomes, individuals are increasingly directing resources towards improving day-to-day quality of life.
1.5.8 Spending on durable goods also increased during this period. In rural areas, the share of durables in MPCE rose from 3.4 per cent to 4.7 per cent, while in urban areas it increased more sharply from 4.0 per cent to 7.4 per cent. This indicates a growing role of durable goods in household consumption, especially in urban areas.
1.6 GOVERNMENT EXPENDITURE
1.6.1 Public spending is an important growth accelerator not just through demand creation but also provisioning of public goods which markets can sometimes fail to fulfil. This can include development of roads and bridges so that producer can sell its output in markets with highest margins, workers can travel to places with highest earning potential. Similarly, other infrastructure such as power, irrigation infrastructure, digital infrastructure are critical for long-term growth. Revenue expenditure, is also essential to deliver basic services and also serve as safety net to maintain consumption level (such as through cash transfers under SUBHADHRA scheme).
1.6.2 Government of Odisha recognizes the urgent need to boost long-term growth potential. Total Expenditure (including revenue expenditure and capital outlay) as per cent of GSDP has increased to all-time high of 26.8 per cent in 2025-26 BE.
Figure 1.13: Total Expenditure as % of GSDP, Odisha
| Year | Total Expenditure as % of GSDP |
|---|---|
| 2021-22 | 19.0% |
| 2022-23 | 22.9% |
| 2023-24 | 23.4% |
| 2024-25 | 22.9% |
| 2025-26 (BE) | 26.8% |
Source: Budget Documents various years, Finance Accounts, 2024-25, CAG.
1.6.3 The State has also maintained the highest capital outlay (infrastructure spending) as per cent of GSDP consecutively for three years. In 2025-26 BE, capital outlay as per cent of GSDP is expected to reach all-time high of 6.6 per cent. It is also highest among all major states. As per NIPFP estimates1, ₹1 cr of capital outlay spending creates ₹4.8 cr of output impact over the course of seven years. Therefore, Odisha’s focus on accelerating infrastructure spending is expected to yield economy wide benefits in the coming years. Some of the marquee projects such as Bhubaneswar Cuttack Paradip Puri Economic Region (BCPPER) could deliver agglomeration benefits and boost entire economy of the State.
Figure 1.14: Capital Outlay to GSDP, 2023-24 to 2025-26 (BE), in per cent
| State | 2023-24 (%) | 2024-25 (RE) (%) | 2025-26 (BE) (%) |
|---|---|---|---|
| Odisha | 5.4 | 6.6 | 5.4 |
| Uttar Pradesh | 4.0 | 3.7 | 3.8 |
| Assam | 3.8 | 4.9 | 4.1 |
| Bihar | 4.1 | 1.5 | 4.1 |
| Goa | 3.4 | 3.0 | 3.2 |
| Madhya Pradesh | 2.7 | 1.7 | 2.0 |
| Chhattisgarh | 2.2 | 1.9 | 2.2 |
| Himachal Pradesh | 1.6 | 1.2 | 1.2 |
| Jharkhand | 1.2 | 1.2 | 1.2 |
| Uttarakhand | 1.2 | 1.2 | 1.2 |
| States and UTs# | 1.2 | 1.2 | 1.2 |
| Gujarat | 1.2 | 1.2 | 1.2 |
| Rajasthan | 1.2 | 1.2 | 1.2 |
| Maharashtra | 1.2 | 1.2 | 1.2 |
| Telangana | 1.2 | 1.2 | 1.2 |
| Karnataka | 1.2 | 1.2 | 1.2 |
| West Bengal | 1.2 | 1.2 | 1.2 |
| Andhra Pradesh | 1.2 | 1.2 | 1.2 |
| Tamil Nadu | 1.2 | 1.2 | 1.2 |
| Haryana | 1.2 | 1.2 | 1.2 |
| Kerala | 1.2 | 1.2 | 1.2 |
| Punjab | 1.2 | 1.2 | 1.2 |
| NCT Delhi | 1.2 | 1.2 | 1.2 |
Note: Estimate of Odisha in 2024-25 are actuals.
Source: State Finances: A Study of Budgets, Reserve Bank of India, 2026, Finance Accounts Odisha, 2024-25, CAG
1 https://www.nipfp.org.in/publication-index-page/policy-brief-index-page/fiscal-multipliers-india/
1.7 EXPORTS
1.7.1 Odisha exported worth ₹92.48 thousand crore in 2024-25, up from ₹51.74 thousand crore in 2019-20, reflecting a CAGR of 12.3 per cent. The export basket is predominantly merchandise driven, at ₹85.54 thousand crore, accounting for 92.5 per cent of total exports. The services sector, though smaller in scale, has also established a foothold, contributing ₹6.94 thousand crore, contributing another 7.5 per cent to total exports from the State.
Figure 1.15: Total Exports, 2019-20 and 2024-25, in ₹ thousand crore
| Year | Total Exports (₹ thousand crore) |
|---|---|
| 2019-20 | 51.7 |
| 2024-25 | 92.5 |
Source: Directorate of Export Promotion and Marketing, Government of Odisha
1.7.2 Merchandise export has been the principal engine of exports growth in Odisha, expanding at a CAGR of 12.6 per cent, from ₹47.24 thousand crore in 2019-20 to the ₹85.54 thousand crore in 2024-25. The State’s merchandise exports constitute 2.3 per cent of India’s total merchandise exports of approximately ₹3703.4 thousand crores, placing Odisha 9th among major states.
1.7.3 Within the merchandise export basket, minerals and metallurgical products together account for nearly 85 per cent of total exports, with metallurgical products contributing about 58 per cent and minerals around 27 per cent. While both play an important role, mineral exports largely comprise raw materials and are therefore more exposed to price fluctuations in global markets. Metallurgical exports, in contrast, tend to offer greater economic benefits as they involve processing and value addition, which lead to higher and relatively more stable export earnings.
Figure 1.16: Composition of Merchandise Exports, 2024-25, in per cent
| Category | Percentage |
|---|---|
| Metallurgical | 57.7% |
| Mineral | 26.9% |
| Engineering/Chemical & Allied | 8.2% |
| Marine | 5.5% |
| Textile | 0.9% |
| Agriculture & Forest | 0.6% |
| Others | 0.1% |
Source: Directorate of Export Promotion and Marketing, Government of Odisha
1.7.4 Engineering, chemical, and allied products contribute 8.2 per cent of Odisha’s total merchandise exports, reflecting the State’s growing ability to move up the value chain by transforming domestically available raw materials into value-added goods. Marine products exports account for another 5.5 per cent. This has the potential to grow further given Odisha’s long coastline and abundant resources, including brackish water bodies such as Chilika Lake, which support aquaculture and marine production. Textiles contribute 0.9 per cent of exports, while agriculture and forest products make up 0.6 per cent. All other categories combined represent 0.1 per cent of total merchandise exports. Overall, Odisha’s export profile reflects a progression from raw materials to manufactured and higher-value products, leveraging both its natural resources and emerging industrial capabilities.
1.7.5 The top 10 export destinations account for over 64 per cent of the total value of exports from the State, with China being the largest at 21.5 per cent. This is followed by Turkey (7.4 per cent), South Korea (6.5 per cent), United Kingdom (6.4 per cent), United States of America (5.5 per cent), Malaysia (3.9 per cent), Mexico (3.6 per cent), Vietnam (3.5 per cent), Japan (3.1 per cent), and Bangladesh (3 per cent).
1.8 PRICES
1.8.1 During 2025-26 (April-Dec), retail inflation in Odisha, as measured by the Consumer Price Index (CPI), declined sharply to 0.1 per cent. This marks a significant moderation from 6 per cent in 2024-25, with the easing trend becoming particularly pronounced after January 2025. Low and stable inflation preserves purchasing power, especially for low- and middle-income households, by keeping essential goods affordable. Moreover, easing inflation creates space for lower interest rates, encouraging investment, consumption, and overall economic growth.
Figure 1.17: Inflation in Odisha and India over Time (CPI Combined), 2023-24 to 2025-26, in per cent
| Year | Odisha (%) | India (%) |
|---|---|---|
| 2023-24 | 6.5 | 5.4 |
| 2024-25 | 6.0 | 4.6 |
| 2025-26 (Till Dec) | 0.1 | 1.7 |
Source: CPI Division, MoSPI, Government of India
1.8.2 The easing of retail inflation primarily reflects disinflation in food and fuel prices, which together account for 52.7 per cent of the CPI basket. Two factors have anchored disinflation in the food segment, sustained contraction in vegetable prices, and moderation in pulses prices. Fall in inflation can also be attributed to proactive measures undertaken by both Government of India and the State Government. Some of the initiatives include augmentation of buffer stocks for essential food items, strategic sales of procured grains in the market, trade modulation to manage supply constraints in key products. Good monsoon rainfall boosted agricultural output across crops, while favourable rabi sowing conditions further eased price pressures.
Table.1.3: Category-wise Inflation over Time (CPI), 2025-26 (Apr-Dec), in per cent
| Category | Weights | Combined | Rural | Urban |
|---|---|---|---|---|
| Food and Beverages | 45.86 | -2.5 | -2.5 | -2.6 |
| Vegetables | 6.04 | -19.4 | -19.6 | -18.9 |
| Pulses and products | 2.38 | -16.0 | -14.6 | -22.2 |
| Spices | 2.50 | -3.6 | -3.9 | -1.9 |
| Meat and fish | 3.61 | 0.6 | 0.3 | 1.7 |
| Egg | 0.43 | 1.4 | 0.8 | 3.8 |
| Milk and products | 6.61 | 2.6 | 3.1 | 1.6 |
| Prepared meals; snacks; sweets etc. | 5.55 | 2.9 | 2.9 | 2.8 |
| Category | Weights | Combined | Rural | Urban |
|---|---|---|---|---|
| Cereals and products | 9.67 | 3.4 | 3.5 | 3.2 |
| Sugar and confectionery | 1.36 | 5.1 | 5.3 | 4.4 |
| Fruits | 2.89 | 8.5 | 9.0 | 7.2 |
| Non-alcoholic beverages | 1.26 | 9.4 | 8.2 | 9.1 |
| Oils and fats | 3.56 | 19.4 | 19.9 | 17.5 |
| Fuel and light | 6.84 | 2.0 | 2.0 | 1.9 |
| Clothing and footwear | 6.53 | 1.9 | 1.4 | 3.5 |
| Miscellaneous | 28.32 | 5.4 | 5.5 | 5.2 |
| Household goods and services | 3.80 | 2.2 | 1.3 | 4.4 |
| Recreation and amusement | 1.68 | 2.3 | 2.6 | 1.6 |
| Transport and communication | 8.59 | 2.3 | 3.3 | 0.4 |
| Health | 5.89 | 5.2 | 5.1 | 5.5 |
| Education | 4.46 | 8.0 | 12.9 | 2.6 |
| Personal care and effects | 3.89 | 11.7 | 8.8 | 18.3 |
| Housing | 10.07 | - | - | 1.9 |
| Pan, tobacco and intoxicants | 2.38 | 1.1 | 0.4 | 3.9 |
Note: Inflation is estimated as the average of monthly y-o-y in CPI (combined).
Source: CPI Division, MoSPI, Government of India
1.8.3 At the all-India level, CPI inflation during 2025-26 (April-Dec) moderated to 1.7 per cent, compared to 4.6 per cent in the previous year, indicating a widespread easing of inflationary pressures across the country.
1.8.4 Reflecting these favourable macroeconomic conditions, the Reserve Bank of India (RBI) has described the economy as being in a “Goldilocks phase”, a period characterised by low inflation and strong growth. With inflation under control, the RBI has adopted a supportive monetary stance, cutting the repo rate by a cumulative 125 basis points since February 2025. According to the latest press released by RBI, inflation in 2025-26 is projected at 2.1 per cent, close to the lower bound of the RBI’s target range of 2-6 per cent. As per RBI, inflation for first two quarters of 2026-27 is projected to be 4.0 per cent and 4.2 per cent respectively.
1.9 CONCLUSION
1.9.1 With GSDP nearing the ₹10 trillion threshold, and a projected growth rate of 7.9 per cent, well above the ten-year average of 6.6 per cent, Odisha’s expanding share in the national economy highlights its growing economic importance.
1.9.2 This performance is the outcome of deliberate and forward-looking policy choices. Recognising that durable growth must be broad-based, the State is strengthening the resilience of its agriculture sector through crop diversification, regenerative agriculture practices, and development of fisheries and livestock. Simultaneously, efforts are underway to move towards processing and agri-value addition to capture a greater share of the agricultural value chain. Further, policies and initiatives are deployed to translate the State’s significant mineral resource base into domestic value addition through downstream industries and products. These efforts are complemented by a growing services-led diversification. Building on its success in attracting IT and IT-enabled services, the State is positioning itself as a competitive destination for knowledge-intensive and new-age sectors. Odisha is also proactively positioning itself at the forefront of emerging growth frontiers, including Green Hydrogen, Global Capability Centres, advanced machinery. These initiatives reflect an approach, aligned with the State’s long-term vision of Viksit Odisha.
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The narrative series that build on this research.