Inclusive growth has been the mantra of the UPA government since it came to power four years ago. It is an Opposition-ruled state, however, that has scored exceedingly well on that count. Orissa, one of India?s most backward states, has received a pat on the back from the World Bank which, in a new report, commends the BJD-led government for turning around the fiscal fortunes of the state while doing much to alleviate poverty between 2000 and 2006, the period of study in the report. According to the report entitled Orissa in transition: from fiscal turnaround to rapid and inclusive growth, the state has lifted nearly 3 million people out of poverty in that period, with much of the alleviation in the poorest southern region and among the relatively poor scheduled castes. This, while achieving the strongest fiscal turnaround among all Indian states in the same period. A deficit of 5.9% of gross state domestic product has been turned into a surplus of 2.8%.
The evidence from Orissa suggests that there is no necessary conflict between economic reform, fiscal consolidation and poverty alleviation as long as there is a transparent and relatively less corrupt government, working in the interests of the people. This is something for which chief minister Naveen Patnaik must be complimented. The World Bank has also commended the government?s focus on the completion of infrastructure projects, and its singular focus on outcomes. Yes, as the report says, 45% of Orissa?s population still remains mired in poverty, and much needs to be done to improve the lot of the tribal population. But the state has options to act. It must now use its fiscal surplus to invest more heavily in agriculture and rural infrastructure, which should bring about the next wave of poverty reduction. It must also use resources at its disposal to invest in education and health, where Orissa still lags other states. Still, there is enough reason to be optimistic that good governance will help Orissa attain its own target of becoming a better-than-average state with less than 10% poverty by 2020.