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Development in Orissa? Think again

Development in Orissa? Think again

Author: Nilmadhab Mohanty
Publication: The Pioneer
Date: April 21, 2009
URL: http://www.dailypioneer.com/170853/Development-in-Orissa-Think-again.html

Many of the projects announced by the Naveen Patnaik Government are languishing. Investors complain the business climate in the State is clouded by bureaucracy and administrative incompetence

There is a telephone number in Delhi when dialled gives you a pleasant surprise. You will hear the voice of Chief Minister Naveen Patnaik reminding his caller, in his faltering Oriya, about his commendable record in "development" and appealing to him to re-elect him for another term so that Orissa can be put firmly on the path to progress.

In Orissa, what are the major strategic issues of development and how has its top political leadership addressed it? That Orissa is one of the most backward and poor States in India is well-known. Its per capita income is less than half of the national average. The structure of the State's economy is typical of a backward region. The share of the primary sector in NSDP in 2003-04 was 40.7 per cent, including 25.75 per cent for agriculture. The share of the secondary sector was only 11.8 per cent, which included only 4.8 per cent for manufacturing proper. While agriculture accounts for nearly 26 per cent of NSDP, its share in total employment stood at 68.98 per cent (1999-2000). This means that too many people depend on agriculture which combined with the sector's low productivity made the condition of the majority of the population bleak in pure economic terms. The problem is further compounded by the fact that a large percentage (38.6 per cent) of the population belongs to the disadvantaged scheduled castes and tribes.

Orissa's phenomenal poverty is an outcome of its economic and social backwardness. Its severity may be gauged from the fact that the proportion of BPL population in the State in 2008 was 45 per cent whereas at the national level it was only 26 per cent. In some regions and communities the poverty ratio exceeds even 70 per cent. Considering that India's official poverty line is defined by a minimum food subsistence level, it can be said that almost half of Orissa literally starves everyday.

Given this scenario and the magnitude of the challenges involved, one would expect the Chief Minister of the State to be a leader with a passion for his job, someone who dreams and lives economic development and poverty reduction.

Also development, in a situation such as Orissa's, to be sustainable must go beyond mere labour-intensive rural works like building roads, digging wells or constructing houses for the poor. These are no doubt necessary for poverty alleviation, but for long-term development and for providing sustainable livelihood to the people there has to be a sectoral redistribution of employment from agriculture to non-agricultural activities like industry and services. There are too many people depending on agriculture, most living in abject poverty. Many of them have to be taken out from farm occupations to non-farm activities. Simultaneously there has to be improvement in agricultural production and productivity. The question that needs to be posed is: Is their any strategic thinking at the highest policy-making level on this matter followed by a concrete action programme to implement the selected strategy?

Development of non-agricultural activities, in particular manufacturing industries and associated services (such as transport, trade and commerce, tourism, information technology-related occupations etc), is an absolute must to diversify Orissa's economic base and redistribute employment of its people. In the absence of large urban concentrations in the State, its rich mineral deposits provide the base for industrialisation through value-addition.

However, unless properly planned and managed with particular emphasis on human resources development, the State's natural resources can be a trap promoting rent-seeking behaviour (rather than entrepreneurial activities) on the part of the rapacious politicians, public servants and businessmen. There is hardly any evidence of any comprehensive strategy or purposive action and the approach to industrialisation has mainly focused on signing MoUs with companies, large and small, national and international. And the implementation of these agreements has been tardy and inefficient.

The Government has signed nearly 70 MoUs of which 49 are for steel projects and the rest distributed among aluminium cement and power plants. While it has taken credit for these investment proposals, a closer examination shows that most of the projects are in preliminary stages and are facing many hurdles. Even the high-profile project, South Korean company POSCO's 12-million tonne steel plant near the Paradeep port which was at one time touted as the largest single foreign direct investment proposal in the country, is languishing and Biju Babu's dream of having a coast-based integrated steel plant remains unfulfilled. In fact none of the ten proposals for mega steel projects, for which MoUs have been signed, has made any significant progress.

Investors complain that the State Government's promotional efforts are inadequate, difficulties created by the vested interests are not effectively countered and the business climate is hampered by too much of bureaucracy and incompetence. And at the political level there is little understanding of the difficulties involved in setting up industry and business. The State Government's ineffectiveness in dealing with the law and order situation firmly - dramatically exhibited by its unwillingness and inability to vacate the roadblock of a major highway near Kalinga Nagar for almost a year in 2006/2007 - seems to have conveyed an impression of weakness, thereby affecting adversely its efforts for promoting industrial and business activities.

State Governments in our country are Chief Minister-centric and style and approach of a Chief Minister set the tone for the entire administration. Chief Minister Naveen Patnaik enjoys a high reputation for personal integrity in sharp contrast to the alternatives available to the people of Orissa. While this is no doubt essential for good governance, it alone is not enough to bring about economic and social transformation in a backward State. For this to happen the leader needs to have a vision for the future and a capacity to transform that vision into reality. He must have a passion for development, commitment and a firm resolve and tenacity to implement the required measures to lift his State out of poverty.

A friend recently suggested that the Orissa people are great practitioners of "chamugiri", a hang hover from the feudal "gadjat" culture of yester years. The 'Raja' is constantly paid obeisance as the 'chamu' and the 'prajas' show unbound loyalty to him; he maintains his distance from them and continues to enjoy his life in splendid isolation while the 'prajas', remain mired in abject poverty. At least in the 21st century we should grow out of this mentality and demand of our leaders to lead with passion, conviction and commitment.

- The author is a former Industry Secretary, Government of India.

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