Odisha Emerges as Key Driver of India’s Post-Pandemic Economic Recovery

Bhubaneswar: Odisha has emerged as one of India’s leading states in driving economic recovery from the lows of the COVID-19 pandemic, registering a remarkable compound annual growth rate (CAGR) of over 6% in Gross State Domestic Product (GSDP) between FY20 and FY25. This performance surpasses the national average of 5.3% during the same period, as per a report by India Ratings.

A major factor behind Odisha’s impressive growth has been the expansion and diversification of its manufacturing sector. The share of manufacturing in the state’s real Gross State Value Added (GSVA) rose from 22.8% in FY20 to 26.7% in FY24. Traditionally known for basic metals and petroleum products, Odisha has benefitted from a global upswing in commodity prices. However, the state’s growth story now includes emerging sectors such as apparel, chemicals, food processing, and machinery, according to the India Ratings report.

Other states like Assam, Jharkhand, Punjab, and Andhra Pradesh also saw an increase in manufacturing shares, but Odisha stood out for its steady industrial diversification and sustained momentum.

Odisha’s economic output is expected to grow by 7.2% in FY25, compared to the national average of 6.4%, taking its GSDP to an estimated ₹9.5 trillion. Per capita income is projected to grow by 10.6% to ₹1,82,548, narrowing the gap with the national figure.

In terms of sectoral performance:

• Industry is expected to grow by 6.1% and contribute 43.9% to GSVA.

• Services will grow at 10%, contributing 37.1%.

• Agriculture & Allied Activities will expand by 3.3%, contributing 19% to GSVA. Notably, Odisha’s agriculture sector has grown at a five-year average of 7%, ahead of the national average of 4.1%.

Odisha continues to maintain strong fiscal discipline. The state’s fiscal deficit stands at 3.4% of GSDP while it maintains a revenue surplus of 2.9%. With a debt-to-GSDP ratio of 13.2%, Odisha boasts one of the healthiest public finance profiles among Indian states.

Further signaling its growth ambitions, the state has earmarked ₹58,195 crore for capital outlay in FY25—amounting to 6.1% of GSDP, the highest among major Indian states.

“Despite initial setbacks due to the pandemic and prior economic slowdown, Odisha’s recovery trajectory has been robust, led by proactive diversification, infrastructure spending, and sound fiscal policies,” said Paras Jasrai, economist at India Ratings.

As India looks toward sustainable and inclusive growth, Odisha’s development model—rooted in industrial expansion, rural upliftment, and fiscal prudence—offers a promising blueprint for other states to follow.