Industrialization and Protest Movements in Orissa by R. N. Mishra SignUp

In Focus

Photo Essays


Random Thoughts

Our Heritage


Society & Lifestyle


Creative Writings

Book Reviews
Literary Shelf
Analysis Share This Page
Industrialization and Protest Movements
in Orissa
by Prof. R. N. Mishra Bookmark and Share

Industrialization including mining activities has received wide acceptance as a major strategy for development all over the world. In the post-independence period, India embarked on a course of industrialization under the aegis of the public sector, which assumed “commanding heights”. The private sector also did not lag far behind under a system called ‘mixed economy’. 

After a lapse of four decades, there has been a shift in emphasis following the processes of liberalization, privatization and globalization. The strategies, however, continue unchanged though the role of the public sector has been shrinking, assigning an ascending role to the private sector including foreign investors. The corporate houses both private and public are the agencies to carry on directly the programme of industrialization. However, even in the changed scenario, the state, functioning within a system of competitive politics and democratic framework, continues to be the prime mover and guardian of the whole enterprise. 

Of late, a new trend is in evidence in the process of development in many parts of the country, which poses a serious threat to the process of industrialization. It not only involves colossal loss and premature closure of the industrial units but also generates a good deal of social tension and political turmoil leading to political instability. While the state taking the advantage of the new economic reforms starts the process of industrialization, the local people resist the developmental efforts raising a host of questions which affect adversely their lives. In the process the forces which are released create insurmountable difficulties in the path of industrialization, leading to closure of the units in a few cases. The strategy is put to searching questioning, putting the state in a fix. The paper is based on the recent experiences of the mineral-rich state of Orissa bent on a massive drive for industrialization.

Orissa is predominantly an agricultural state where nearly seventy per cent of the working population depends on agriculture. The state has nearly forty per cent of Scheduled Castes (SC) and Scheduled Tribes (ST) population, which together make 9.78 million, apart from the people belonging to the Other Backward Castes (OBC). The state is rich in mineral resources. It has 5,428 million tones of iron ore deposit which is one-third of the total iron-ore deposits of the country. One-fourth of the coal deposit of the country is in the state, in addition to 98 to 99 and 63 percent of chromites and bauxite deposits respectively. Besides, the available infrastructure includes water in plenty, power at a cheap rate, 480 kms of coastline with one large port at Paradip and two proposed ports at Dhamra and Gopalpur. (1)

In order to bring about economic development, the government of late has launched a massive programme of industrialization. In 2005 the state government has signed as many as 43 memoranda of understanding with various corporate bodies for setting up of their industrial units at an investment of Rs 1, 60,000 crore. The state has still certain pockets inhabited by tribal and backward class people which have been identified as industrially least developed areas where the local people are pressing for setting up of industries.(2) It has been estimated that there are as many as 92 industrial units engaged in production of Sponge Iron, which are mainly concentrated in six districts. As regards production of steel, as many as 43 private companies have shown interest to start mining and production. At least eight of them have signed the Memorandum of Understanding (MOU) pending follow up action on their part.

Against this background, the resistance movements of the local people against certain industrial units need to be probed deeply for the future of industrialization of the state. Voicing protests against industrialization by the people affected by it is not new in the state but the ongoing movements are different in that they have worked out an unprecedented unity among the tribal and backward masses against the industrial establishments as well as against the state government, making all the major political parties watchful of the situation to derive political mileage. The conflict has caused an impasse. The solution appears to have moved too far.
The Kalinga Nagar Industrial Complex 

The Government of Orissa mooted the idea of developing a major industrial complex in the early nineties of the 20th century in the mineral-rich region of Dangadi, Duburi and Sukinda located in the district of Jajpur. The proposed complex has the capacity of producing 15 million tones of steel annually. The complex includes about 13 mineral-based industries such as iron and steel, stainless steel, sponge iron and ferrochrome etc. Iron ore and chromites are the raw materials for these industries, which are available in plenty in the region. The state government has already signed a Memorandum of Understanding with nearly ten units spread over an area of 13,000 hectares. The major corporate houses such as the Tatas, Visa, Jindal, Mesco and some others have already started their projects and a few of them are nearing completion. In pursuance of the MOU, the state government would grant mining lease to the concerned industrial units and provide them with land for setting up their industries. 

Further, the state government has agreed to acquire land from the local residents as well as to look into all matters relating to displacement, rehabilitation, and resettlement. However, all the efforts for industrialization are met with violent protest movements with increasing frequency. Since the last one year starting with the attack on the ADM of Jajpur and some policemen on May 9, 2005 during the Bhumipuja of Maharashtra Seamless Limited (MSL) (3) over two dozen incidents of industrial violence have taken place and the MSL had to withdraw. The tribal people inhabiting the region have repeatedly expressed their dissatisfaction over the payment of compensation, which ultimately resulted in loss of life of 13 persons who were from among the tribal community on January 2, 2006 .In the encounter that ensued between the police and the displaced people one Police Havildar was killed and four policemen were seriously injured while the compound wall of the 15,500 crore steel plant of the Tatas was under construction. (4)

The compensation package was announced in 1994, according to which a land oustee was to be paid at the rate of Rs 35000 per acre through the Industrial Development Corporation (IDCO), a corporation of the Government of Orissa. Mediating between the State Government and the displaced people, the IDCO sold the land to the industrial houses at a rate of Rs 1,00,000 per acre. The compensation package was revised later in order to enhance the rate of compensation to Rs 50,000 per acre. The people complained that they were paid less and being forced to lose their means of livelihood. The unfortunate incident of loss of lives of 13 persons not only united the tribal communities of the state but also attracted the sympathy and support of the tribal people from outside the state, giving rise to a complicated political situation and completely stalling the construction work of the industrial unit. The growth of pan-tribal unity is an emerging political phenomenon against the state political leadership. (5)

Since January 2, 2006, the tribals of Kalinga Nagar have launched an indefinite economic blockade on the National Highway 200 at Madhuban Chhak. They are not prepared to work out any compromise with the State Government. So far all efforts of the government to appease the tribes have failed, and the present situation is characterized by a deep emotional overtone. The place where the 13 victims of police firing were cremated has been named as Bir Bhumi and on May 23, about 5000 women from Orissa, Chhatisgarh, Jharkhand and Andhra Pradesh took out a rally and resolved not to lift the road blockade which is by now one year old. (6)

Among other things the 7-point charter of demands of the Bistapan Birodhi Janamanch includes a complete halt to displacement in the area. The economic blockade has drawn the attention of the judiciary which has issued direction to the state government to take suitable steps to lift it as early as possible.

When the political climate is heavily charged with anti-government slogans and an unprecedented unity among the tribes of the state and of the neighboring states has emerged as a strong political force, the Tata Steel Company has announced a package. The package, it seems, is an act of wisdom on the part of the concerned corporate house. According to the scheme, every displaced family would be considered as a family of the Tata Steel and the Company would look into their all-round development. The Company would take stock of the social and economic conditions of the displaced families every month and all the families numbering about 700 would be provided with identity cards and their progress in matters of rehabilitation and resettlement would be monitored regularly. Further, the Company would give employment benefit to all the displaced families and also revise the compensation package after proper negotiation with the people .The Company has formed a task force which includes 7 tribal members to look into all matters relating to displacement and resettlement. The package, it is claimed, is the best in the country but so far there is no response to it on the part of the protesters. (7) How ever, with the passage of time, there is bound to be a change in the attitude of the people, partly as a matter of necessity. The poor tribals can not resist the efforts made by the state. In fact, gradually people’s solidarity is getting diluted; a few of them are coming forward to accept the new package of resettlement and rehabilitation announced by the Government. Nevertheless, people’s discontentment persists and no solution has been worked out so far.

Protest against the Vedanta Alumina Limited at Lanjigarh

The Niyamgiri Hill of Kalahandi district has a bauxite deposit of1950 lakh tons. The district of Kalahandi is one of the least industrially developed parts of the country. In view of its special characteristics of backwardness, a special project of the central government called KBK (Kalahandi, Balangir, and Koraput) covering three former backward districts of Orissa is under implementation. In the recent past, the district attracted a lot of attention of the media due to outbreak of famine conditions, drought and incidence of extreme poverty of the masses leading to sale of babies. The district has a sizable population of the SCs, STs and OBCs. 

Recently, the Vedanta Alumina Limited has started its work for setting up a plant at Lanjigarh and mining of bauxite from the Niyamgiri Hill complex. While efforts are being made to change a predominantly rural economy and hilly area into a major industrial complex, the people have been strongly resisting the work of setting up of the plant and mining of bauxite. A mass movement is going on since 2004. On April 7,2004 the Niyamgiri Suraksha Samiti, an organization of one thousand tribal people of the area was formed to protect the forest, land and water of the area, giving the slogan, `Vendat Hatao’ (Remove Vendant).The people’s cause has been taken up by another organization known as the Green Kalahandi. The `Niyamgiri Suraksha Samity’ has been formed by the people to resist leasing out of the hills to the company on the ground of protecting the environment (8). The Niyamgiri has a number of perennial hill streams, which are useful for agriculture and for the purpose of drinking water of the tribal people living in the foothills. It is also the source of the river Bansadhara that flows through Andhra Pradesh. The hill is a place of worship of the people belonging to the Khond tribe.

The people of two villages namely Kinari and Bolbhatta displaced and resettled in the foothill of Niyamgiri are not at all pleased in their new environment .The people protest against the use of ground water by the Company in a drought-prone area. For their cause, they have also sought the participation of political leaders of the neighboring Andhra Pradesh. The local Congress leaders and the CPM are active in the movement. The agitating masses point out that the company has a plan of giving employment benefit to only 286 persons and the use of water from the river Tel by the company would spell disaster for the cultivating class of the district, besides causing environmental degradation (9).

The proposed alumina project by the Vedanta group in Lanjigarh has provoked a political controversy between the ruling BJD and the opposition Congress. While the supporters of the BJD claim that the project will not only bring development in the area but will also generate employment’, the opposition points out the possible adverse impact on Niyamgiri’s bio-diversity. The reports by a Supreme Court committee and different scientific organizations have worked out the adverse implications of the project. A tribal leader and President of the Niyamgiri Suraksha Samiti Daisingh Majhi says: `Niyamgiri hills, popularly called Niyam Penu (God) are considered as the mother of the tribals. Such emotional issues should be kept above petty politics’. Further he adds; The tribals are bothered about the area’s forests, natural springs and wildlife resources. The parties should not indulge in politics over the nature’s gift` (10)

The mining of bauxite in Orissa has given rise to virulent mass movements in the past. In the eighties of the past century, a strong movement of the local people completely stalled the mining activities of the Bharat Aluminum Company (BALCO), a Government of India undertaking with foreign technical collaboration. The BALCO initiated officially its mining work on May2, 1983 that was scheduled to be completed by April, 1985.The project came to a grinding halt due to mass based agitations of the local people, mostly tribals despite the fact that the BALCO claimed to have invested 30 crores rupees on the project (11). The people have raised a number of significant questions relating to their development. Starting with purely religious demands, their movement came to embrace secular matters such as environmental protection, ecological balance and eradication of poverty in a perpetually drought-prone area. Incidentally, the BALCO has been sold to Sterlite/Vedant. The proposed steel project of the Tisco at Gopalpur, which involved acquisition of 3500 acres of land, and displacement of over 2000 people in the late Nineties met the same fate. It appears history is being repeated.

Protest against Posco-India Steel Plant at Paradip

The people of Jagatsinghpur district in coastal Orissa have been actively engaged in a protest movement against Posco, a South Korean company planning to set up its 51000-crore steel plant since June’2005. The company has also a plan to open a new private port of its own in order to avail the facilities of special economic zone. The Posco Pratirodh Sangram Samiti, an organization of the local people, has been spearheading the movement (12). 

The people living in 22 villages of three gram panchayats of Ersama block situated in the Ersamma Assembly constituency are likely to be displaced after the work starts. The memorandum of understanding with the South Korean major was signed on June22, 2005 by the state government. It is proposed that the company would be given mining lease of 600 million tons of iron ore for which a separate MOU has to be signed, even to the extent of permitting the company to export iron ore. Further the state government would acquire 435 acres of private land for the plant which involves displacement of 20,000 to 25,000 of people (13). 

Since then the villagers of three gram panchayats such as Kujang, Dhinkia and Nuagaon have been restive over the issue. The Samiti has raised a brigade of 1200 people who are ready to keep the movement alive. At times there have been violent clashes between the supporters of the proposed plant and the people, calling for intervention of the police (14). 

In one such incident which took place on April11, 2006, at Dhinkia village 11 persons were injured and nine activists were rounded off by the police (15). 

The people also complain against police excesses committed at the behest of the state government. More than 30,000 people have pledged not to obey any rule which the state government may enforce, pressing for their displacement. The Sangram Samiti has also involved the children and women of the locality. They have put up barricades at the entry points to these villages which are guarded by women and children to prevent entry of government and POSCO officials (16). 

Political parties such as the Congress, the CPI, the CPM and the OGP have been extending support to the people. On 22 June, 2006, as many as 20,000 people including 3,000 children decided to observe mass fasting to protest against their displacement. In view of the people’s agitations the setting up of the plant is running behind the schedule. Despite the announcement made by the POSCO officials to the effect that the proposed plant would recruit 97% Indians in its labor intensive project and would extend employment benefits to 48000 people directly (17), the people have turned a deaf ear to it. They strongly object to the setting up of the plant on several grounds. 

Firstly, the phoenix method to be applied by the company for melting iron would adversely affect the environment for which no industrial house has obtained permission through out the country. 

Secondly, the huge quantity of water which would be utilized by the proposed plant from the river Mahanadi would not only affect the cultivators but also rob the fishing folk of their only means of livelihood. It is estimated that the number of project affected people is likely to cross one lakh. 

Thirdly; the question of giving mining lease to a foreign company at a cheap rate has stirred up patriotic feelings among the people. It has been pointed out that the Government of Orissa would lose one lakh and thirty two thousand crores of rupees in the event of granting lease of the iron ore to the company. The Hind Majdoor Sabha has expressed its deep concern over the proposal to set up a new private port by the Posco since it would affect the working of the existing Para dip port. The Sangram Samiti has raised a band of young men who are prepared even to sacrifice their lives in resisting the move for displacement.(18)

Within a period of one year the Company has made a part of its investment and until now the Mou on mining has not been signed. This has cast a spell of uncertainty over the proposed project. Further, the visit of Union Minister of Commerce to Orissa on July 1, 2006, and his reported statement (19) that it is not desirable to grant mining lease to Posco has complicated the situation. The Union Minister of State Sri Jayaram Ramesh has made it clear that though he supported the setting up of the plant he was opposed to export of 600 million tons of iron ore by the Posco. The Company officials have reportedly stated that the question of starting the project did not arise in the event of cancellation of the mining lease. However, the Company has deposited money at the rate of Rs 25000 per acre with the IDCO for acquisition of land for its plant. The Company has set a month’s deadline for land acquisition at a time when different organizations have been launching agitations protesting against the project including some activists now sitting on a fast-on-to-death since two weeks. (20)

The three instances cited here are tips of the iceberg. People’s protests against displacement are widespread all over the state and gaining momentum against the industrial houses. The displaced people of the Mahanadi Coalfields Limited (MCL), a subsidiary of the Coal India have been strongly pressing their demands for rehabilitation, taking resort to agitational methods. (21) While the state government looks upon all these resistance movements as law and order problems, and has been trying to tighten the security arrangements in and around the industrial hub, the people have raised motley of questions which merit serious attention of the corporate bodies. Besides the questions of rehabilitation and resettlement, the questions of betterment of the quality of life of the project-affected people, an important segment of the stakeholders, are intimately associated with all these movements. More over globalization has brought in economic patriotism, a new force that is very much active.

As observed here all these protest movements are mainly directed against displacement of people and for protection of the local environment. The people complain against poor rate of compensation and gross inadequacies in matters of resettlement and rehabilitation. There are several instances in the past in which people have suffered heavily due to apathy of the state government wherever major projects were undertaken. As regards employment benefits to the displaced people, it is found that the PSUs have been lagging far behind in the state. It is estimated that the MCL is yet to provide jobs to nearly 2,017 displaced families and, the Neelachal Ispat Nigam at Kalinga Nagar to at least 450 in recent years.(22) 

Over a period of five decades the Rourkela Steel Plant has not solved this problem for which the people are agitating. Mostly the people who are hit very hard in the process are the poor farmers, the tribals and other people of the weaker sections of the society. (23) The government bureaucracy is not responsive to the needs of the displaced people and people’s discontentment against industrialization find _expression through various methods which have serious social, economic and political implications. 

As regards industrialization of Orissa in the present context, many questions have been raised. We are yet to find out satisfactory answers to them. The first and foremost of them relates to total depletion of mineral deposits. The state has 5,428 million tones of iron ore deposits of which the government can recommend mining lease for 1,529 million tones. The rest has already been leased out to various companies. If all the 43 projects start working, they will need 2,785 million tones of ore creating a shortfall of 1,256 million tones. The mega POSCO plant alone needs 600 million tonnes. The situation would be still more complicated if Arcelor-Mittal goes ahead with his 12 million- tone- project, its requirement being 600 million tones of raw material. The picture appears equally gloomy as regards alumina projects.

The second question relates to acute shortage of water for the purpose of irrigation. Widespread mining activities would certainly lead to drying up of the natural sources of water. It is estimated that nearly one crore of agriculturists would be affected by industrialization. All the rivers, springs and other sources of water are getting dry up in view of mining activities in Koraput, Keonjhar, and Sundargarh districts recently. The mega industrial units would require water which now feeds the paddy fields of the state. The cultivators of Sambalpur have been raising their voice against supply of water from the reservoir of the Hirakud Dam to the industrial units located in and around Sambalpur and Jharsuguda. Unless proper care is taken, industrialization may have a great adverse impact on agriculture and ruin the economy of the villages. In this context, we may refer to the report of the World Bank on India. 

It has been mentioned in the report that 43% of the rural population in Orissa is very poor due to fall in agricultural production which has a damaging impact on rural economy. The report makes it clear that there is a declining trend in agricultural production. While the growth rate during 1980 to 1992 was 3.2%, it came down to 2.4% during 1992 to 2003. Thirdly, it may be pointed out that the average life span of a plant is 35 to 50 years. What would happen to the state after all the mineral deposits are used up barely after 50 years? Widespread mining operations are sure to result in destruction of forests and green belts. The devoured land mass may not be suitable for agriculture nor for any productive purpose. People in Africa, Australia and in other places have paid a heavy price for unregulated industrialization. The fourth question relates to economic patriotism. Globalization has opened the doors for all multi-national entrepreneurs. All business houses run for profit.

Industrialization through foreign investors inducing displacement of local people may be an issue with which people may not reconcile easily. The rehabilitation and resettlement policy needs to be formulated in such a way that the people feel that they are not the losers. The offer needs to be made attractive and make the people willing to accept it. Attachment to hearths and homes, community assets and local resources forms a natural bond among the people in a locality. It is a social reality which is woven with the threads of the psycho-social behavior of the individual and community in a locality for a number of generations. In all matters of development induced mass displacement State intervention may be desirable with utmost care. In a competitive system, the party in power takes the decision on behalf of the government. The opposition may look for an opportunity for political mobilization on an issue to discredit the government. The bureaucracy has its own way to implement government decisions. 

To what extent structural adjustment has been made following liberalization and globalization since 1991 to suit the present condition is a big question. It is the people who are called upon to make the sacrifice. The situation needs a thorough analysis and great understanding by the policy-makers. Whether we live in an age of nationalism or globalization it is the people who matter. In stead of going deep into the real grievances of the project affected people, the party in power as well as the opposition groups is busy in rallying the people in their favor, creating factions and cleavages at the grass-roots. The real issues of human dignity are lost in the ongoing political controversies. The most important issues which have surface the movements are livelihood issues and rights of the certain sections people which include the tribals, peasants and the fisher folk for whom the compensation package and rehabilitation measures hold out no promise.

This article is jointly written by Dr. R.N. Mishra and Dr. Anjana Maitra

References and Foot Notes
1. Districts at a Glance,2001, Orissa, Directorate of Economics and Statistics, Government of Orissa,2001;
2. The people of Baud and Mayurbhanj are demanding for industrialization
Also see Survey of Backward Districts of Orissa (New Delhi; National Council for Applied Economic Research,1969),
3.See the report in the Prajatantra Saptahiki,(Cuttack)15-21,January,2006
4.ibid pp.4-8
5.ibid p.6
6. The Times of India, Bhubaneswar-National, May 24, 2006 7.
7.The Sambad (Sambalpur),May 17,2006
8.The Times of India, May 28,2006
9. See Felix Paddle and Samarenra Das, The Political Economy of Aluminum Industries( in Oriya), Bikalpa Bichar, (Samata Bhavan, Bargarh) No25,May,2004. See also The Sambad,May17,2006
10.The Times of India, August 25,2006
11. See the report of a team of concerned scholars, `Bharat Aluminum Company and Gandhamardan People’s struggle’ presented at the seminar on Development and Displacement at the Institute for study of society and culture, Burla, December 20-21, 1987.
12.The Times of India, June 25,2006
13. The Sambad, July 22, 2006.
14.The Times of India, June 16,2006
15.The Times of India, June 21,2006
16.The Sambad, June 22 &24,2006
17. The Sambad, June 30, 2006.
18. The Times of India, June 6,2006
19. The Sambad, August 22,2006
20. The Times of India, September 10,2006 and October 7,2006
21.The Times of India, May 22,2006
22. `PSUs top rehab default roster’, The Times of India, May 22, 2006.
23. See S. Supakar, The Sufferings of the sub-merged areas of Sambalpur (in Oriya), Ganatantra Parishad, Kabita Press, Cuttack, 1956. Also see R.N. Mishra's Disruption of Tribal Social organizations and the Demand for a separate State of Jharkhand’ in N.P.Chaubey (ed) Tribal Techniques, Social Organization and Development: Disruption and Alternates (Allahabad: Indian Academy of Social Sciences, 1983) pp115-168.    

Share This:
More by :  Prof. R. N. Mishra
Top | Analysis
Views: 7522      Comments: 1

Comments on this Article

Comment very good and people friendly. required what are the further studies may possible..

manas ranjan sahoo
10/19/2011 09:35 AM

Name *
Email ID
 (will not be published)
Comment *
Verification Code*
Can't read? Reload
Please fill the above code for verification.
1999-2022 All Rights Reserved
No part of this Internet site may be reproduced without prior written permission of the copyright holder