Revisiting Orissa Development Plans - The missing issues in the debate: by Sandip K. Dasverma

The recent firing in Kalinga Nagar, Jajpur, Orissa, India - is a symptom of a disease that is plaguing the development process in Orissa (handled by Govt. of Orissa (GOO)), not the disease itself.

The disease or the real issues are missing from the ongoing debate, too. It may be deliberate or may be just missing because no body thought up or don’t care– I don't know.

Because, I don’t observe in the history GOO of last 60 years, any significant difference among various parties in power at different times and their dealing with the tribal, Harijon or poor. That is, any qualitative difference in compassion for or fairness to, the tribal or Harijon, who invariably happen to be poor. Except may be some, at the time of Late Naba Krushna Choudhury, who abolished the Zamindari system

Be it as it may, but let me define precisely three issues that are missing in this debate, which undermines it’s quality:
A. The failure of successive Governments, turning a PIMBY (Put In My Backyard) situation in to a NIMBY (Not in My Backyard).
B. Dealing with the Bee lines of Memorandum of Understanding (MOU) signers, at their term and not GOO’s terms. As a result everyone else but GOO who is winning?
C. Neglect of Externalities
a. Cost of restoration of environment
b. The finishing up of resources in one or two generations what is handed down to us through generations.

A. Rehabilitation(R & R):
We see every year hundreds of thousands of poor Adivasis, Harijon and poor in general are moving to Hyderabad brick kilns, Bombay slums, or Surat ship wrecking yards, Assam Tea Gardens, Delhi slums or Calcutta slums etc. If these people are ready to move, with family for a better job / chances of a better living they will relocate for the prospect for a better life. But they are not.


The rehabilitation packages do not even have prospect for a better life for them. The R & R projects have brought no bright future for the displaced persons, both in speed of delivery or access to make them attractive.


The Rourkela land officer has probably got promoted to become Chief Secretary or a Secretary of GOI or GOO but the displaced persons have not got their compensation finalized in 50 years. This has obviously made the R & R package unattractive. Our people are no doubt largely illiterate but wise in protecting their self interest.

Thus the newly proposed displacements are bringing so much resistance. And people have come to believe – they have leverage to negotiate till they move out of land. In addition the land regime of the state did not give settlement documents in 50 years and yet insist on records.

My argument will be incomplete without one issue being brought to light – the issue of compensation, as wrongly thought out by the revenue admin – based on the British legacy and carryover of the Raj.

I have seen it being argued ad infinitum that people are being compensated for their land at market price. Thus is a very challengeable theory based on following facts:


1. The homestead land, the tangible asset: The basis is the land bought or sold in the immediate area in the past, which is usually deflated to avoid taxes with active connivance of the land officer and his office. This is well and widely known.
Due to the deficiencies indicated, some times even having an honest officer is a liability because they are unwilling to go beyond books.

2. The intangible assets: These are never compensated and I think there lies the rub. How do you compensate people for things which can’t be measured in rupees, like living of the extended family in one neighborhood? Childhood friends having home in the same neighborhood and living a cooperative life? Since this can’t be reasonably done – but has to be evaluated to make the R & R package, acceptable and attractive to the displaced.

3. The imperial era tactics of provoking people to violence through show of force, application of force to kill, maim, jail, torture and oppress the displaced people into displacement, distress and submission is a little out dated, in this era of instant communication.

I got the posting on the Kalinga nagar firing within 4 hours sitting 13 time zones away. Appointing commissions and not implementing or making public their reports is another ridiculously out dated policy.

Those citizen who are not involved, whose opinion can’t be bought, are impartial judges of the event, who the GOO has to win over. They are the civil society. They may be supporter of development but they will definitely not side with the GOO, if they are found to be failing due other reasons or if the dealing is imperial. Thus the GOO, essentially its bureaucracy, should realize that only fair, transparent and expeditious acts will win the approval of the world at large, which is closely watching this game.

4. I like immensely the idea put forward in the Bajayanta Panda’s interview in Rediff about front ending the rehabilitation settlement. Because people do move voluntarily given real and measurable economic incentives – particularly the underprivileged and poor. Incentives are always more than what is due – more than the market price, based on tangibles.

Lastly, development should touch the very people who are affected by development and at the end of the day, those displaced must be better off, than they previously were.
I do not agree or accept the false prophet’s preachings - that development has to accept the suffering of a some poor and underprivileged for the greater good of the society. Every life is equally valuable and it is where the Govt. in free market comes in.

B Dealing with bee lines of MOUs, rationally in the interest of people:
The Orissa Govt. has signed 42 MOUs last year, .up from may be 0 or Single digit last year. I am sure no one will argue that it was caused solely by the efficiency of the current Orissa Govt, though it may be one of the factors. The same CM is there for more than 6 and half years now. And the NDA Government at center was more Orissa friendly, as an ally of the BJD. So when you clear your vision and look for reasons, for this success, the market forces stare out at you as the answer. In fact is that world is running out of the unassigned iron and the Aluminum ore deposits. Eastern India is one of the few places in the world where such ore are available. So this self-interested drive to Orissa to tie up the mines – as long term captive mines. It is understandable.

What is not understandable is the naivety of GOO to protect it’s enlightened selfinterest.. They have not been able to protect the interest of the people of the state, one could argue. Instead of following the example of Oil cartel or forming a similar organization with the other ore rich states like Chhatisgarh and Jharkhand (which are part of Indian union) and bettering the term for the state–– it has competed with them and made the terms better for the MNCs like POSCO and Tatas. .

In fact they have brought down the prices of the ore and license fees or at least tied them down permanently so that there is no scope of escalation, in 50 years. This obviously is not a very smart negotiation. The terms should get better when there is more demand and the abolition of steel and coal price equalization policy has given these states built in natural advantage. Instead of taking advantage of they have due stupidity or sabotage acceded to long term fixed price for ore. HAVE THEY FORGOTTEN THE EPISODE OF SELLING POWER FROM HIRAKUD @ 1 KWh PER ONE PAISA TO INDAL, WHEN PRODUCTION COST WAS 6 TO 15 PAISA AT VARIOUS TIMES? And in whose interest they have fixed the price of Iron Ore for 30 years to 50 years when it’s world market price is rising. A few months back there was even a strike by Sponge Steel Manufacturer’s association of eastern India, who wanted to ensure that they get ore at Rs. 2000/ Tonne or at least limit the price to Rs. 2500/ Tonne. So why they can’t use this situation to escalate mine leases?

I would expect GOO make all the MOUs public where it belongs and experts and civil society to analyze whether there is a provision of escalation of ore prices on following accounts.
1. Rising price of steel
2. Diminishing reserve of iron ores and other ores.
3. Or an enormous error has been done by fixing the ore prices in an world where the free market ensures rising prices of items with shrinking reserves.
The pattern of pricing will be very clear if the terms signed to of 42 MOU by GOO are compared with those signed by Chhatisgarh and Jharkhand, as well as themselves: If this has been properly done Orissa will become rich due to it’s natures endowment. Else like Gorumahisani and Badampahad it’s natural resources will be drained but it’s people will remain as is - poor.

It must be kept in mind that these MOUs are one way only. Based on past experience companies can walk away from MOUs under various pretext – for example if price of steel has a free fall. We all remember MOUs signed by Late Biju Patnaik’s government with Swaraj Paul and others in 1990s, is not it?


If we take Oil prices as a guideline however we have seen it come up from $1.28 in 1970 to $70 today and large prosperity of middle eastern countries and others due to Oil. With a cooperation between Orissa, Chhatisgarh and Jharkhand (and being land locked they are more likely to cooperate if not pushed) there is a huge prospect of these states getting enough resources for food, shelter, health, education and clothes in next 10 years.
However GOO is hooked to it’s secret signed document. Not only it’s tenure but it’s successor Governments for next 50 years.


C. Neglect of Externals:
Recently Al Gore, the respected former Vice President of US and Al Blood formerly head of Goldman Sachs asset management, wrote an article with in Wall Street Journal, the prestigious mouth piece of Multinational Business. In that OpEd of Wall Street Journal, dated March 28 wrote about what and how externalities are being progressively handled in the 1st world. In that article they state and I quote:
“The industrial revolution brought enormous prosperity, but it also introduced unsustainable business practices. Our current system for accounting was principally established in the 1930s by Lord Keynes and the creation of "national accounts" (the backbone of today's gross domestic product). While this system was precise in its ability to account for capital goods, it was imprecise in its ability to account for natural and human resources because it assumed them to be limitless. This, in part, explains why our current model of economic development is hard-wired to externalize as many costs as possible.”


“Externalities are costs created by industry but paid for by society. For example, pollution is an externality which is sometimes taxed by government in order to make the entity responsible "internalize" the full costs of production. Over the past century, companies have been rewarded financially for maximizing externalities in order to minimize costs.”


"License to operate" can no longer be taken for granted by business as challenges such as climate change, HIV/AIDS, water scarcity and poverty have reached a point where civil society is demanding a response from business and government. The "polluter pays" principle is just one example of how companies can be held accountable for the full costs of doing business.


Extensive arguments on the processes used to dump externalities and their impact on local populations are presented by Sanat Mohanty.

Without public review the steel bonanza will turn out to be bonanza not for Orissa people but for the steel companies. They contracts must be strong enough so ensure that when the exploitation is finished the ground will be restored. The reputation of the companies of public orientation is not enough.

20 years back Birlas and Tatas were the top companies, today they are not. Reliance is.
But the GOO will be there and it has to pay the price of a bad contract today, like GOO paid INDALCO for 50 years.


Unexpectedly, our discussions are not covering these important missing points. They should show up in these discussions, sooner than later to make the debate meaningful and useful.
Sandip Dasverma has argued extensively for the rights of the displaced. This article was first published on his blog .