THEBUSINESSBYTES BUREAU

BHUBANESWAR, FEBRUARY 9, 2026

As the Union Budget 2026-27 sharpens its emphasis on MSME-led expansion and manufacturing-led growth, community organisations from Western Odisha are pressing for a concerted push to scale up micro, small and medium enterprises to generate large-scale employment in districts such as Kalahandi and Rayagada. Local representatives argue that while the region hosts several mega industrial plants, their capacity to create jobs remains severely constrained due to the absence of a strong MSME ecosystem that feeds into these large assets. Despite the presence of major aluminium infrastructure, employment generation has stalled as plants continue to operate below capacity because of weak raw material linkages.

Industry assessments underline that MSMEs form the backbone of non-farm industrial employment in mineral-rich regions. These enterprises typically span fabrication, transport fleets, equipment maintenance, packaging, civil works, warehousing and engineering services that support large industrial assets. When upstream industrial activity slows or remains underutilised, MSMEs are the first to feel the impact. What should otherwise be a vibrant industrial belt is reduced to a low-opportunity region characterised by informal work, fragile incomes and outward migration.

Satyanarayan Pattanayak, Founder Secretary of Seba Jagat, emphasised the broader socio-economic impact of such linkages. “Community-friendly industrial growth, when linked with manufacturing, processing and service ecosystems, has the potential to create better-paying jobs while also increasing demand for produce from the farm and forest economy. MSMEs thrive naturally in sectors such as logistics, fabrication, maintenance, power services and ancillary manufacturing, converting large-scale industrial activity directly into grassroots-level jobs and income opportunities for local families,” he said.

Western Odisha already hosts significant aluminium infrastructure across Kalahandi, Rayagada, Angul and Jharsuguda. However, the lack of steady local bauxite supply has weakened the entire value chain. Refineries and smelters running below capacity generate limited demand for local vendors, contractors and service providers. Sector estimates suggest that each fully operational mining block can support hundreds of MSMEs, most of them locally owned, creating sustained income and employment at the district level. The absence of this multiplier effect has meant fewer contracts for local entrepreneurs, increasing informalisation of skilled labour, distress migration of technicians and youth, and weakened local revenues.

Abhay Raj Mishra, President and National Convenor of PRAHAR, a national organisation working in the area of employment generation, pointed to structural constraints rather than asset scarcity. “Western Odisha does not suffer from a lack of assets but from traditional bottlenecks. Mega plants without MSMEs do not create adequate livelihoods. Unlocking responsible bauxite mining would immediately activate thousands of small businesses, generate local jobs, and ensure that industrial growth translates into income, dignity and opportunity for people in Kalahandi and Rayagada,” he said.

With the Union Budget stressing higher capital expenditure, domestic value addition and mineral-sector reforms, community organisations believe this is a decisive moment for Odisha to act. Activating responsible local bauxite supply is viewed as the fastest route to convert national manufacturing incentives into tangible district-level outcomes. From a fiscal perspective, operational mining blocks are estimated to generate ₹1,500–₹2,500 crore annually in royalties and District Mineral Foundation funds, resources that can be channelled into MSME clusters, common facility centres, credit support systems, logistics parks and industrial estates across Western Odisha.

Global demand for aluminium components such as cables, conductors, solar frames, electric vehicle parts, packaging materials and precision equipment is expanding rapidly alongside India’s renewable energy, EV and semiconductor programmes. Locating MSMEs close to raw material sources and processing hubs gives Western Odisha a natural competitive advantage. Without captive mining, community groups argue, the anchor remains weak and the ecosystem never fully forms. With it, Kalahandi–Rayagada could emerge as a strong aluminium MSME hub, much like Coimbatore’s association with pumps or Rajkot’s reputation in engineering.

Community organisations, industry groups and local entrepreneurs are now calling for time-bound activation of bauxite blocks, structured vendor development programmes linked to refineries and smelters, MSME credit facilitation, skill development aligned with local industry needs, and stronger local procurement norms. For Western Odisha, they say, the choice is stark: continue hosting underutilised assets that function like isolated islands, or build a thriving MSME mainland around them that delivers jobs, enterprise growth and lasting regional development.