By Dr. Saroj Kumar Mahapatra
Two tribal girls in Narayanpatna Block in Korapur District, Orissa
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A new dawn with lot of dream in the eyes of millions of people in Orissa cropped with the construction of Paradip port. The was conceived as a major all-weather port of India, and the shore around Paradip was earmarked for rapid development of an Industrial hub.
Mega industries in steel and fertilizer sector were conceived for the area. The leaders of the state of every hue proclaimed the dream of new Orissa with growth with social justice and reduction of poverty at all level in every public speech they made and the school children learnt from their text books about this dream.Alas, the dream remains unfulfilled even after 60 years of Indian independence. The efforts have been very slow, primarily not because of lack of funds but because of lack of commitment in the second generation leadership to fulfill this dream.
The first generation leadership faced enormous difficulties in organizing finance for development and the hurdles were compounded by the scare the trade unions gave to the few industries that had come up in the state at Paradip or elsewhere.
The trade unions with their new found power (freedom of speech and expression, freedom of association, collective bargaining rights etc) under Independent India did not know how to productively use their power and instead went on a competitive path of destroying what ever wealth creation activity was going on by calling for strikes and work stoppages.
Almost all industries in the state, especially in the public sector went sick. The few which survived did not have the enthusiasm to expand by making new investments. The wheel of industrial activity had hit inertia before it could accelerate.
Missed Development Bus
Orissa missed the development bus in the 1950's and 60's by failing to capitalize on the green revolution, shutting the agricultural route to prosperity unlike Punjab and Haryana. Orissa missed the development bus in the 1970's and 80's by failing to capitalize on the industrial revolution, shutting the industrial route to prosperity unlike Maharashtra and Gujarat.
Orissa again nearly missed the development bus and lagged behind Karnataka and Andhra Pradesh by not paying enough attention to the magical IT revolution.
Orissa has rich mineral resources comparable with the oil-rich countries. It has huge iron ore (32%), coal (24%), chromite (97%) and bauxite (71%) of the country's entire reserve.
Orissa had the first steel plant in public sector at Rourkela, equipped with the latest steel making technology in the 1970's - the LD process. Yet, Orissa could not capitalize on its advantages.
The state owned mining company which has exclusive mining rights over most deposits, has exported huge quantities of iron ore over the years while the steel industry in Orissa stayed stagnant.
Area of concern
At current prices, Orissa's per capita income for 2003 was Rs 12,388 against the all-India average of Rs 23,359. In percentage terms, Orissa's poverty rate for 1999-2000 was the highest among all States at 47.15 per cent. In a survey of 15 States in 2001, the Human Development Index ranking for Orissa was 11th.
The performance of the State's farm sector has not been too good, though Orissa has vast tracts of agricultural land. To make it a vibrant sector all that required was to merchandise farming, initiate scientific cultivation and multi cropping and formation of cooperatives to generate enough collective resources to make the first two options feasible.
Unfortunately, people did not trust one another enough and the whole cooperative farming movement failed, leaving the land more divided and less utlilised than ever before inspite of having enough water.
The irrigation projects did not yield the desired result, except reducing the ravage of floods. Orissa ranks 17th among big states when it comes to agriculture according to a recent poll conducted by India Today.
Orissa has the share of 6.8 per cent growth of State-wise Gross State Domestic Product from agriculture for the period 2000-01 to 2001-02 (at 1993-94 prices) indicates. The yield of foodgrains (kg/hectare) for the 1990-91 to 2000-01 period declined, at -0.54 per cent, against the all-India average of 1.79 per cent.
The farm sector's share in the total workforce in 1999-2000 was 68.9 per cent - much above the all-India figure of 57.4 per cent. These numbers, along with the dismal performance of the sector, contribute to Orissa's poor socio-economic conditions.
The industrial sector accounts for a mere 9.1 per cent of the total workforce and this doubts the trickle-down effect said to have been generated by the increasing levels of investments.
When employment trends are compared, the State fares almost on a par with the country average; the daily unemployment rates for 1999-2000 being in the range of 7.1 per cent for rural Orissa and 9.5 per cent for urban Orissa against the national averages of 7.2 per cent and 7.7 per cent.
The State Government has already signed 43 memoranda of understanding (MoUs) for steel plants, including six megaprojects, since 2002, but a closer assessment reveals that most projects are only in the first phase of implementation and would have to cross many hurdles.
The number of projects approved may require more resources than what the State is endowed with, both in terms of reserves and infrastructure.
Also, there has been opposition from activists to these projects on environmental grounds. The displacement effect and the social consequences also pose serious threats to the execution of the projects.
An `Investment Attractiveness and Climate' study of the various States by the Twelfth Finance Commission ranked Orissa 11th in 2001.
Role of media in Development
Former President APJ Abdul Kalam quoting the Daily News Papers of Israel, says, "They carry on their front pages all the success stories of the hardworking Israeli people - in research, in agriculture, in technology, in sports etc, and mention the stories of war and the casualties in the other pages; they want the people to wake up to read inspiring stories, promising hope and the 'possibilities of dedicated work.
It is time our scribes too should reconsider their strategy and start telling the success stories more to inspire people to perform, abandoning their penchant for giving headlines to sarcasm and failures under the illusion of selling more papers by selling sensation.
Need of FDI Vehicle for Growth
To cut a long story short, real growth still eludes Orissa and its people. Orissa has not yet realized its potential to excel either in Agriculture, Industry or Commerce.
Barring the successful Alumina Plant of state owned Nalco, the state could hardly make use of its Bauxite reserves. Same is the story of Nickel and Coal. The main reason why Orissa could not take advantage of the industrial revolution is its slow pace of developing transportation infrastructure - rail, road or port.
A study of the Infrastructure Index, which takes into account the Power, Communications and Transport Indices, shows that Orissa's aggregate of 75 falls much below the national average of 107.
Orissa did one right thing early, being the first reformer of the power sector and became the first state to have quality power supply - an essential requirement for development of the IT sector but lagged behind Andhra and Karnataka, where the leaders went out of the way falling head over heels to woo big investors in IT.Lack of good infrastructure is considered to be the main factor responsible for it.
There exists a fresh opportunity to catch the development bus once again. The only hurdle in boarding the development bus could be our incapacity to learn from the past.
First, we should think of inclusive growth ie, there is space for everyone in this development. It is for whole of Orissa and for all people in Orissa irrespective of where they live and what they are likely to lose or gain in the short run be it in terms of land they possess, house they live or job they occupy. The sacrifice vis-à-vis development is to be seen in a holistic perspective instead of individual loss-gain arithmetic.
Second, local and state governments should focus on building both physical and social infrastructure alongside improving the quality of education. to support a growing economy.
Finally, we should have an open mind. We should not assume the investor is obliged to invest for charity and should not aspire for any return from investment. For long we have held the investor with suspicion, as if the investors' eyes are set on our family silver. Gone are those days when imperialism rode piggyback on investment.
The investors name does not matter. The investor entity's place of origin does not matter. Otherwise how else one can justify the relenting of powerful Governments in Europe before the shareholders decision to accept a hostile bid of a marauding Indian called Mittal for an European perfume called Arcelor.
The European community learnt from the Mittal story that the world of investors does not recosgnize traditional symbols like race, colour or region. Hence, Orissa should be open to FDIs without fear.
The Development Bus often takes a cycle of 100 years to revisit, as history tells us; this time round it has returnessd early and let's not let this golden opportunity pass by.
The Author was faculty at Xavier Institute of Management, Bhubaneswar.
