By Bizodisha Bureau, Bhubaneswar, March 25, 2018: Odisha has outsmarted other states with its competitive advantage in the cost of doing business, according to a study by the Asian Development Bank (ADB).

The criteria is the cost of setting up and running a business. The ADB study mainly dealt parameters like wage rate of skilled labour, industrial power tariff and land costs in which Odisha excelled over Andhra Pradesh, Maharashtra, Gujarat, Tamil Nadu and West Bengal.

“A low wage rate is a positive factor for the setting up of businesses from the perspective of industry since it drastically reduces the operating expenditure of any business”, the study says.

“Odisha’s low cost of doing business is one of the key strategic advantages which attract manufacturing companies to the state. Industrial power tariff, labour wages, cost of living and land rates are highly competitive in Odisha vis-à-vis other states. With stable, proactive and industry-friendly government machinery, Odisha makes a compelling value proposition for the investors. We have received encouraging response from both domestic and foreign investors,” said Sanjeev Chopra, principal secretary (industries) with the Odisha government.

The wage rate of skilled labour in Odisha is Rs 6,240 per month and next to it is Maharashtra (Rs 8,739) and West Bengal (Rs 8,888). Andhra Pradesh with a wage rate of Rs 9,818, has the highest cost of labour. The other two industrially leading states- Gujarat (Rs 9,414) and Tamil Nadu (Rs 9,115) also have wage rates significantly higher than Odisha.

Power surplus Odisha also boasts of the lowest industrial power tariff amongst the six chosen states. At Rs 4.20 per unit, Odisha’s tariff has wide differential with Maharashtra (Rs 7.20) and West Bengal (Rs 6.60).

Low power tariff leads to lower operating expenditure, making Odisha more competitive.

Land cost in key industrial locations in Odisha is in the range of Rs 3.6 crore per acre. Compared with this, Gujarat’s land rates at its industrial locations of Vadodara, Surat and Bharoch is more than double in the band of Rs 8 to 10 crore per acre. In Maharashtra, the cost is even higher as land rates hover between Rs eight and Rs 16 million an acre.

Odisha has staged roadshows in Mumbai and Bengaluru, culminating its showpiece summit- Make in Odisha in December 2016. From the three events, the state received 124 investment intents, 76 of which have translated into firm commitments.