fixed rate infrastructure loans, the stock refrain is that this will create asset liability mismatch in banks ’ balance sheets as their liabilities are mostly short - term. even then banks have a combined infrastructure loan portfolio of about rs. 6 trillion ( us $ 110 bn ), representing about 9 % of the total bank assets in india of rs. 71 trillion ( us $ 1. 35 trillion ). as against this, corporate bond market is around rs. 9 trillion ( us $ 170 bn ). but this common and popular, but again uninformed and counter - intuitive, refrain that banks cannot fund long - term fixed rate infrastructure assets is untenable in that banks have not thought of using a very “ vibrant ” interest rate swap ( irs ) market, where outstanding notional principal amounts aggregate rs 60 trillion ( us $ 1. 14 trillion ) ( almost 82 % of total banking assets in india as also of the nation ’ s gdp )! for banks can easily transform their short term liability into a long - term fixed rate one and thus create a synthetic long - term financing solution for long gestation infrastructure projects by doing the following : ( i ) receive fixed rate for one year and pay floating overnight rate in the irs market. ( assuming banks ’ average liability is about one year ). bis central bankers ’ speeches ( ii ) receive floating overnight rate and pay 5 / 10 - year in irs market. this effectively synthetically transforms a one - year floating rate liability of bank into a synthetic 5 / 10year fixed rate liability. by loading margin over this rate, banks can make a 5 / 10year fixed rate loan to an infrastructure company. and, significantly, considering that irs trades about 140 to 150 basis points below sovereign yield, it is win - win for both banks and infrastructure companies who, even after bankers ’ spreads / margins, will be able to borrow at around 5 / 10 year govt. bond yield ( currently 8. 40 % ). that is as simple as it can get in terms of creating two - in - one fixed - rate long - term marketbased financing solutions for infrastructure. incidentally, another uninformed and untenable, refrain against use of irs market is that this strategy entails “ basis ” risk and “ liquidity ” risk. it has been established that there is a statistically significant and positive correlation between one year irs rate and one year bank deposit rate of 0. 75 which will improve further to near perfect level of 0. 90

of 53 per cent at the national level. table 1 share of employment by broad industry group ( usual principal status ) ( per cent ) source : labour bureau, government of india. apart from the greater concentration of labour force in agriculture, the demographic structure of odisha with a higher share of working age population is also favourably disposed towards growth ( chart 6 ). hence, the major challenge for the state is to generate employment in industry and services so that labour force can be released from low productivity agriculture activity. this will require improvement in the quality of labour force with higher expenditure in education and health. in this regard, the private sector can play a major role in supplementing the government ’ s efforts in provision of higher education and health services. bis central bankers ’ speeches social indicators notwithstanding the rapid economic growth in the recent years, odisha remains low in human development. with low urbanisation, lower per capita income, high incidence of poverty, high infant mortality and lower life expectancy rate as compared with the national average, odisha was ranked 22 among the 23 states1 in terms of human development index 2007 – 08 ( chart 7 ). table 2 standards of life indicators ( as percentage of households ) source : census 2011, government of india. north eastern states excluding assam was taken together as one entity and therefore only 23 states were compared hdi ranking in the india human development report 2011, government of india. bis central bankers ’ speeches the share of households having access to basic civic amenities such as safe drinking water and electricity remains relatively low compared to the national average, though there has been substantial gains in the decade between 2001 and 2011. similarly ownership of household assets such as television, telephone and mechanised personal transport remains lower than the national average. the population of households having banking facility, though improving, still remains lower than the national average ( table 2 ). state finances there was substantial improvement in state finances as odisha achieved the targets set out in the fiscal responsibility legislation ( frl ) well ahead of the stipulated time - frame. the revenue account turned surplus in 2005 – 06 followed by fiscal surplus in 2006 – 07. although the fiscal position of odisha had shown some deterioration in 2008 – 09 reflecting the combined impact of macroeconomic slowdown and sixth pay commission award, it has since reverted to the path of consolidation. with revenue surplus and moderate fiscal deficit, the need for market borrowings was low. in fact since 2006 – 07 the state has refrained from market borrowings. this has had a favourable