Objectives: Given the large amount of inflow of Foreign Direct Investment to Odisha, this study aims to find out the FDI elasticity of employment and poverty in Odisha (India).
Methods/Statistical Analysis: Mostly secondary data are used in this study, which is supplemented with grassischolar_mains level evidences. FDI inflows and industrial employment data are collected from RBI and Directorate of Industry. The analysis has been done by tabular and graphics presentations and through regression. Semi-log model is fitted to compute the growth rate of FDI inflow and economic growth of the state. Double log model has been fitted to examine the FDI elasticity of poverty via employment.
Findings/Application: The study found that there is huge inflow of FDI into the industrial sector of Odisha during 2002-03 to 2016 especially contributed by POSCO, Arcelor Mittal and Vedanta. However, both the FDI elasticity of employment and FDI elasticity of workers have shown statistically insignificant relationship and hence failed to reduce poverty. FDI by Vedanta in Lanjigarh, Jharsuguda and by POSCO in Jagatsingpur has captured agricultural land and forest, where a large proportion of people were depending for their livelihood, which have laid down multiple burdens among the displaced households. The displaced households got deprived from their’ permanent source of livelihood as the establishment of the factory destroyed the forest on which the households have been depending for ages together. The factory also encroach the agricultural field, which was the source of staple food security for the displaced as well as nearby living households. Further, the company has failed to provide a permanent source of livelihood to these households, which has broken down the health and education conditions of these households. Hence from the policy perspective agricultural land may be refraining from FDI venture.