Odisha Maintains Top Position in Capital Investment for Third Consecutive Year
Bhubaneswar has emerged as the epicenter of India's most ambitious infrastructure development strategy, with Odisha maintaining the highest capital outlay as a percentage of state income for three consecutive years. According to the Odisha Economic Survey 2025-26 tabled in the state assembly on Thursday, this spending is projected to reach an unprecedented 6.6% of gross state domestic product (GSDP) in the upcoming fiscal year, solidifying Odisha's position as India's leading state in public investment.
Record Infrastructure Spending Drives Economic Growth
The comprehensive economic document reveals that Odisha has dramatically increased its infrastructure budget to construct long-term assets that will fuel economic expansion, generate employment opportunities, and enhance public services. Capital outlay experienced a remarkable 42.9% surge this year, climbing to Rs 65,012 crore, which represents 22.4% of the state's total government expenditure. This represents the most substantial commitment to public investment witnessed in recent years across any Indian state.
Officials have outlined that this substantial investment will be channeled into critical sectors including:
- Road and bridge development
- Irrigation infrastructure modernization
- Water supply and sanitation systems
- Major regional initiatives like the Bhubaneswar–Cuttack–Puri–Paradip Economic Region (BCPPER)
The BCPPER project alone is anticipated to significantly boost economic activity throughout coastal Odisha, creating new industrial corridors and improving connectivity between key urban centers.
Economic Multiplier Effect and Fiscal Prudence
The economic survey provides compelling evidence of infrastructure investment's broader economic benefits, noting that every Rs 1 crore allocated to capital projects generates approximately Rs 4.8 crore in economic activity over a seven-year period. This multiplier effect demonstrates how strategic infrastructure development supports the entire economic ecosystem, from manufacturing and services to agriculture and trade.
Remarkably, Odisha has achieved this investment surge while maintaining exemplary fiscal discipline. The state's fiscal deficit remains comfortably within the Fiscal Responsibility and Budget Management (FRBM) limits, and its debt-to-GSDP ratio stands at just 13.6%, significantly below the permissible ceiling of 25%. This financial prudence has earned Odisha the top ranking in NITI Aayog's Fiscal Health Index, reflecting sophisticated financial management practices.
Political Controversy Over Economic Performance
The economic achievements have not escaped political scrutiny, with the Biju Janata Dal (BJD) launching sharp criticism against the current BJP-led state government. BJD spokesperson Lenin Mohanty accused the administration of pushing Odisha's economy into "reverse gear," arguing that the state has lost economic momentum despite the central government's "double-engine" governance promise.
Mohanty presented comparative growth statistics, noting that Odisha recorded GSDP growth of 16% in 2022-23 and 9.6% in 2023-24 under the previous BJD government. In contrast, growth moderated to 7.2% during the BJP government's first year and improved only marginally to 7.9% in the second year. He further contended that Odisha's current economic performance now trails behind states including Bihar, Andhra Pradesh, Telangana, and West Bengal, which are experiencing growth rates between 14-16%.
Strategic Vision for Future Development
Despite the political controversy, the state government remains committed to its infrastructure agenda, with clear objectives to enhance irrigation coverage, modernize transportation networks, and elevate living standards across Odisha. The Economic Survey emphasizes that this sustained focus on capital outlay will play a pivotal role in shaping the state's economic trajectory in the coming years.
The strategic allocation of resources toward productive assets represents a forward-looking approach to development that prioritizes long-term economic resilience over short-term gains. As Odisha continues to invest in its physical infrastructure, the state is positioning itself as a model for balanced economic development that combines ambitious investment with fiscal responsibility.
