Prashanta Ch.Panda and Brajaballav Kar, January 12, 2016 : To-day [January 12] is celebrated across the country as the National Youth Day as youth is the backbone of the society and the most vital section of the community. Young generation play a key role in the economic development of a region, state or country. In  Odisha rich in all kinds of resources, natural, mineral, forest, coast etc, and majuscule section of youths struggle to make a mark for a variety of reasons, the predominant reason being underemployment as well as unemployment.

Odisha has around 11 lakh registered unemployed youtha of which 10.43 lakhs are educated, according to the Assembly proceedings. As the specter of unemployment haunts the young ones while they are pursuing graduation degree, there is every chance that he will invest more in higher education hoping to get a job. Hence, the game of additional educational attainment goes on. In private and government sectors these additional degrees are taken as safe bets though skill wise nothing much has been added.

The mindset of a job seeker is difficult to change even with higher additional degrees. Risk taking attitude and inability is substituted with this education. The society does not get much benefit from these degree-holders with investment in higher education. In Odisha unemployment rate in graduates and postgraduates is abnormally higher at 14.8% and 8.2%, respectively. This only reinforces the fact that skilled jobs are not on offer in Odisha and there is also a big mismatch in societal demands / requirement and skill sets pursued by youths.

Many in Gujarat avoid expensive higher education and still end up as successful entrepreneurs. Rajasthan, Tamilnadu, Maharastra, Punjab also breed higher proportion of entrepreneurs. Exposures at early age to business and trades in Mumbai, Delhi and other metros make their youths more prepared and more freelancing with occupations.

Syllabi, quality of teaching in higher education is much to be blamed. The revenue starved government is being forced to recruit these qualified youths. Many educational institutions in private and government sector have been able to escape their accountability as these enrolled students do not question the process and deliverables. Needless to say risk aversion on the part of the students devoid the education system of agility. Rather the agility is only provided by the educational entrepreneurs who set themselves for higher goals and try to compete at national and international level by introducing change in the curricula and its execution. That does not mean that we should only blame the disoriented educational system for these blemishes.

In Odisha, at one time there was a talk of investment pouring to the tune of Rs 5 lakh crore to set up metallurgical based industries. For more than 50 steel plants were proposed at one time for which MOUs were signed. But even if they come, they cannot create more than 50,000 direct jobs and bulk of them will be indirect employment to Odias.

Agriculture, the mainstay of the state’s economy is over saturated. This is the reason which is why, skilled and educated youth across the state are working with less or inadequate remunerative job like tuitions, security guards, etc.

Odia youths need to be reinvent themselves under the present circumstances and bank upon self-employment professions. True, non-conducive business environment is leading to poor investment. At the same time, jobs in private sector continue to shrink to almost a half in 2014 from over 7,000 in 2009-10.

The state government has launched a recruitment drive to fill 40,000 vacancies in various departments like Education, Health, Agriculture, Panchayati Raj, and Water Resources. These are mostly development sectors and utility sectors. They have much less multiplier effect in fuelling further investment in associated ancillaries though serve a much useful purpose of making lifestyle cost cheaper. Hopefully each department ensures right accountability and capacity building in these labour forces to provide quality services. If this happens then the pressure of rising deficits today can be adequately compensated by higher purposeful productive workforce in the future years.

To assess the ground reality of our state, let us compare the position of our state with the position of similar poor states of India. In 2013-14 Uttar Pradesh has 44.03 lakh enterprises and Rajasthan has 16.64 Lakh enterprises. On an average, these enterprises can employ three to four employees directly. Uttar Pradesh employs 92 lakh employees in her micro, small, medium enterprises [MSME]. Odisha being rich in minerals has some 33.24 lakh workforce engaged in such oraganisations. Increasing mechanistion forces these MSMEs to seek funds to stay competitive.

In 2013-14, only 2815 new units registered as MSME units in Odisha. Rajasthan was ahead in comparison. Some 17000 new units started operations in Rajasthan. The reported figures for UP, WB, Jharkhand, Madhya Pradesh and Gujarat are 45000, 11380, 3600, 19000 and 58000 respectively. Southern states like Karnataka, Kerala, Tamilnadu have come up with 26000, 15000 and 116393 new operational units. Odisha is falling behind, with respect to MSME starting operations. It is a serious call to all the stake holders to increase the number of new ventures to start.

Growth of the state depends on the growth of the loans. Entrepreneurs need more supportive business environment and favourable banking attitudes. Banking Sector has partly to be blamed for gross neglect of the state of Odisha by many quarters. Banks need to be more sympathetic in their attitude towards small entrepreneurs. This can substantially increase right loan disbursement for the growth of our people and the state.

Approach and judgment of the same manager to an identical situation vary from Odisha to Tamilnadu, Maharastra, Gujarat. This is also revealed by analysis on smaller loan off-takes all India level reveals that. Credit deposit ratio is pathetic in Odisha. You see a big difference in statistics comparing reports of RBI and State Level Banking Committee (SLBC).

(i) Credit Deposit ratio for Odisha is at 44.60% as compared to All India Average of 79% at the end of FY 2014-15. Even lower than other low income States (in terms of Per Capita Gross State Domestic Product). The comparable figures for Madhya Pradesh and Rajasthan are 60.4% and 87.10% respectively.

(ii) Credit Deposit (CD) ratio has further deteriorated to 38.1% in Q2 of FY 2015-16. This is a big concern.

(iii) The share of Credit in Odisha in Total Credit at all India Level is at 1.11% which is significantly lower than the comparable States in India. More than 55% of the deposits mobilised in Odisha is loaned outside the states.

(iv) The credit lent to Agriculture constitutes only 1.35% of Total Agri-Sector loan in India.

(v) The Credit lent to industrial sector of Odisha constitutes only 0.83% of Total Industrial Sector in India.

(vI) Only 20% of the deposits mobilised in Odisha is utilised for the priority sector which is much lower than comparable low income States and only 0.8% is utlised for Educational Loan.
Still worse is the fact that none of the scheduled commercial banks are headquartered in Odisha. This definitely influences decision making. Some of reasons behind noticeable bigger NPAs can be analyzed here as banks get overcautious helping out distressed assets or even financing working capital requirements of solvent enterprises. We cannot blame banks alone.

Our entrepreneurs need to be more trained in project preparation, advocacy, and appraisal. More scientific approach towards attaining efficiency, continued motivation to hold on passionately to their business ideas is important. They should make enough research as they enter into this field. Once in the field after making due diligence entrepreneurs need to give it atleast three years to shape it. It takes two years to understand business dynamics, network establishment and to create a trust in the market for your product and services. Banks look for this. Goodwill generates advocates for your products and services and serves as a guarantee to facilitate future support by banks too.

Your partners are your biggest assets. They complement your efforts and skills, act as shock absorbents. As individual endowments, capacities differ transparency in deals create more solid bondage with humans and institutions. Adding more to business or new business is ok. Buoyancy in one market raises your expectation of revenue for which you tend to diversify. But you need to attain necessary skill sets or else cross subsidisation continues and may affect the established business as limited capital is diverted to other programmes. Banks at times are unaware of such ventures for which they fail to assess the risk that your profile carries or their investment.

In order to be competitive it is essential that you choose right technology and inputs. Rate of depreciation or probability of pace at which new technology for the similar product is introduced is an essential factor. Small and new entrepreneurs need more support and directions here. Unfortunately our institutions have avoided this responsibility towards our entrepreneurs. Staying invested and being connected entrepreneurs become aware of such important changes. Other important part that you learn is choosing right employees, handling tax matters, handling institutions and gaining expertise in liaison. New employees take atleast 3 to 6 months to learn the skills.

Lot of time, exposures and financial expenditure is done on them by the company to help them attaining requisite productivity. With time these attributes can be learned but lack of attitude on the part of the employees make them ineffective. Culture plays a big role here. Or else comparative advantage in financial terms cannot translate market dominance. It hurts and at the same time entrepreneur feels proud when his prized assets i.e. employees are poached by other big firms. Empowerment of your employees means able to turn them into your co-associates in procuring and developing projects. This raises their efficiency, remuneration and commitment to the organization.

Ratio of credit to cash is another important indicator you need to balance. Asset liability management get easier as the trust is built which cushions the time gap in receivables and commitments. Banks are still big disappoints in Odisha especially in serving services sector. Look out for tangibles as collaterals alienate these players. Looking at employment potential of this sector government needs to make urgent measures to direct banks to help them.

These city based organisations hardly get any government support. Rather taking care of changing VAT rules, tax rules, rudeness of the tax inspectors are more of harassing, more cost is added when you consult chartered accountants. Tax inspectors need to be business friendly for Odisha to grow. There is no awareness on single window clearances in Odisha for small players. Big industries have very poor employment potential looking at the capital engaged in those sectors. There is a big gap to be filled up by Business Schools, citizen forums and banking institutions here.

[Prashanta Chandra Panda and Brajaballav Kar are faculty in KIIT University, Bhubaneswar]