According to the Indian Cellular Association (ICA), high value added tax (VAT) rate on mobile phones and the lack of a dedicated state policy on electronics system design and manufacturing (ESDM) has led to lack of investment in Odisha. ICA has also stated that the state’s reluctance to reduce VAT rate has dimmed the state’s prospects for setting up of mobile phones and electronics goods manufacturing facilities. Presently, Odisha government charges VAT at the rate of 13.5 per cent on cell phones priced beyond Rs 5,000.

ICA has urged the Odisha government to reconsider its policy so that the state can attract global and domestic investors in mobile handsets and electronics space. According to ICA research, Odisha does not even figure among the top 10 states in the evaluation criteria set by investors. The criteria has components like state policy being in sync with national policies, friendliness of tax administration, predictability and stability, grievance addressal mechanism and adoption of modern classification and valuation system.