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Mainstream, Vol XLVIII, No 6, January 30, 2010

Regional Disparities, Inclusive Growth and Displacement in Orissa

Viewed From the Development Perspective

Monday 8 February 2010, by Sikta Pati, Sudhakar Panda

There is enough evidence that Orissa suffers from regional disparities. A Regional Imbalances Enquiry Commission was set up by the State under the chairmanship of Justice S. K. Mohanty to look into Orissa’s regional development imbalances and suggest measures to address the problem. It is reported that the Mohanty Commission made a comprehensive and a district-wise detailed analysis of the problem on the basis of certain well-tested indicators of development and came out with their findings. The Report was submitted to the State in May 2008. The Report is yet to be made public.

Our approach to this problem will focus on certain sources of change and development, which in the context of regional disparities have received incidental attention. The southern districts of Orissa like Malkanagiri, Nawarang-pur, Nuapada, Gajapati, Kalahandi and Kandhamal etc. are considered to be the most underdeveloped areas. It is not that the rest of the districts are developed and that there are no other under-developed regions. Mayurbhanj and Keonjhar districts, Nilgiri sub-divison of Balasore district, and many regions in Kendrapara, Sambalpur, Jharsuguda, Sundergarh, Sonepur and several other districts remain underdeveloped.

The objective of this paper is not to survey the entire range of regional disparities and suggest measures to deal with them. We attempt to identify some of the critical deficit areas important from the point of balanced regional development and inclusive growth and examine the impact of land acquisition and displacement on the project-affected people.

The Critical Deficit Areas


The incidence of poverty remains high in Orissa. The percentage of population below the poverty line stood at 39.90 per cent in 2004-05 as against 21.8 per cent at the all-India level. (Economic Survey, 2008-09, GoO, p. 8/1) There is, however, greater concentration of poverty in Southern Orissa which is home to a large “proportion of ST and SC population”. The districts like Gajapati, Kandhamal, Kalahandi Malkanagiri, Nawarangpur and Raygada have 50.78 per cent, 51.96 per cent, 28.65 per cent, 57.43 per cent 55.03 per cent and 55.76 per cent of tribal population respectively. Some of these districts like Kalahandi, Kandhmal and Malkanagiri and Boudh have also a sizeable proportion of SC population which constitute 17.67 per cent, 16.89 per cent, 21.35 per cent and 21.88 per cent of their total population respectively. Predictably these areas have a larger presence of extremely poor families who are landless and illiterate and live below the subsistence level. It may be revealing to note that incidence of poverty has been estimated at 83.61 per cent, 88.88 per cent, 78.42 per cent and 78 per cent in the southern districts of Koraput, Malkanagiri, Kandhamal and Nuapada. (Economic Survey, 2007-08, GoO) Poverty among the STs in the southern region has been estimated at 82.8 per cent. (Food Security Atlas of Rural Orissa, 2008, p.15) Imple-mentation of anti-poverty programmes has not substan-tially reduced the number of families below the poverty line income. A study of the impact of poverty alleviation pragrammes in the Baliguda block of Malkanagiri district could find that only two per cent of the beneficiary house-holds could go above the poverty line. (Panda 2000) And it is doubtful if the people in the region with low education and no training will be found suitable for employment when industries are located in these regions.

Existence of poverty cannot be attributed to a single cause—be it landlessness, unemploy-ment, education, health, caste or religion. There can be only a broad identification of causes. Land and asset ownership, education and occupa-tional patterns, health and physical well-being along with others can be considered as influencing the level of poverty and regional disparities.

There are, of course, several reasons why we have regional disparities and imbalances in Orissa. Two of the most important causes of poverty and which therefore contribute to regional disparities in income and living standards are, in our opinion, education and health. An important reason for identifying these two key variables is that they contribute not only to inclusive growth but also to the human development of the State.

(a) Education:

Education has always been a determinant of one’s income and upward mobility. Quality of schooling and years of college education help raise productivity and entitle students to their jobs and earnings. Provision of education right from the primary stage assumes significance. This is where the deficit starts in the under-developed regions of the State. With a very poor infrastructure and absence of the requisite number of teachers, students in the backward districts/regions have frustrating experience in the schools. Most of the students, as they come from socio-economically disadvantaged commu-nities like the Scheduled Castes and Scheduled Tribes are scared of the teachers (fear of corporal punishment) and do not find anything intere-sting to hold them onto the schools and gradually they start withdrawing from the schools and start looking for jobs in the job market which can offer them only low paid ordinary jobs.

It is not surprising that literacy rate among the SCs and STs in Orissa stood at 55.53 per cent and 37.37 per cent respectively as against the state literacy rate of 63.1 per cent. (2001 census) Malkanagiri, a scheduled district, had the lowest literacy rate of 30.5 per cent. Female literacy rate in rural areas in the southern districts like Koraput, Malkanagiri and Nawarangpur is as low as 15.6 per cent, 18.4 per cent and 18.00 per cent respectively compared to 68.8 per cent in Jagatsinghpur, 66.3 per cent in Puri and 66.3 per cent in Kendrapara districts in the coastal region. The dropout rate among the ST students in the State at the primary school stage in 2007-08 was the highest at 16.89 per cent as against 7.79 per cent and 12.5 per cent for all categories and the SCs respectively. The drop-out rate among the ST students at the upper primary stage and high school stage in the same year stood at 23.83 per cent and 72.8 respectively. The corresponding rates among the SC students stood at 18.80 per cent and 70.00 per cent respectively as against 13.27 per cent and 59.6 per cent for all categories of students. (Economic Survey, 2008-09, Govern-ment of Orissa, pp. 14/3 to 14/10)

Young adults from the communities tend to migrate to towns and cities and find jobs there as construction workers and helping hands in the informal sector. Given the low level of education, they generate low income compared to people with better education. Income inequalities are very much linked to educational inequalities and they reinforce each other and get built-in into the pattern of development and income generation in the state. Educational inequalities and income inequalities which strengthen each other tend to create an objective situation that help perpetuate regional dispa-rities. Continuing poverty of these households generation after generation distance them from the mainstream of development. One finds a low level of education existing with a low level of underdevelopment as is the case in the southern region of the State.

The arrival of industry and opening up of manu-facturing facilities in these regions can offer them few opportunities of employment except as manual workers which again will be very limited. This is what which has exactly been happening in the districts like Jharsuguda, Sundergarh and Kalahandi where new industries are coming up. Districts will record development but development will bypass these poorer house-holds. Their economic insecurities, on other hand, may increase.

(b) Health:

An important impediment to the removal of regional disparities in Orissa is the prevalence of inequities in heath service facilities between the developed districts like Cuttack, Puri and Khurda and the backward districts like Malkanagiri, Kandhamal, Kalahandi and Boudh. State-of-the-art-technology and specialist and super specialist services are available in the developed districts. The poorer districts have to put up with poor health infrastructure and haphazard health services.

Low-income people in the backward districts can hardly afford, because of their poverty, the cost of good health care even for their children who suffer from early death, under nutrition and anemia. Doctors attached to the Primary Health Centres (PHCs) are either absent or function under great constraints. This naturally increases the risks to the lives of the poor who depend on government health services. As against the State figure of 65 infant deaths per 1000 live births, the southern districts like Koraput, Nawarangpur, Malkanagiri, Kalahandi, Raygada and Gajapati have an infant mortality rate of 101, 102, 103, 103 and 107 respectively (2005-06). Kalahandi, in the same year, had one of the highest infant mortality rates in the world at 119 per 1000 live births. (Food Security Atlas of Rural Orissa, 2008, p. 23) Prevalence of under-weight among children is also high in districts like Gajapati, Malkanagiri, Nuapada and Sundergarh. The health situation is really gloomy if we look at maternal death rates. Women in these households work hard at home, in the fields, bear children and do not get the medical attention while giving birth to children.

Occurrence of malaria remains a threat to the people in the tribal areas. As many as 158 blocks in tribal districts, which contribute 70 per cent of the malarial cases, suffer the worst. Sometimes outbreak of mysterious diseases in these regions take a heavy toll of life. Poverty and deprivation leave very little money with people to spend on the treatment of diseases and illness.

Poor health of the people, which in fact begins right from an early age coupled with poor education in the region has its adverse impact on the skill, efficiency and productivity of these people and consequently on their earning abilities. Higher earnings which these people could have earned in a legitimate way had they been given the benefit of good education and good health services are lost to them and to the society for all time to come.

Health needs to be placed in the proper perspective. Provision of improved health care infra-structure with ambulance facilities, child development and maternity care centres, posting of trained medical staff along with doctors trained in public and tribal health and organisation of health camps may bring benefits to the people in the region.

Land Acquisition and Displacement

Orissa today is passing through a phase of industrial growth. It was never so good before. Investors perceive Orissa to have much better growth prospects than in the past. Industrialists have shown a keen interest to make investments in the production of steel, almunium and ferroalloys, power and ports. Both the gover-nment and the industries, however, face real difficulty regarding acquisition of land for setting up industries. There is opposition to land acquisition by the people for fear of loss of an asset which has been a source of income and livelihood for these households for generations. A fear of risk, a feeling of nervousness and uncertainty has gripped the minds of these people. They genuinely feel threatened about their future when along with agricultural land they are asked to part with their homes and homestead land. Promise of cash compensation, jobs, housing, education and health facilities has not been taken seriously by the people to be affected by the projects.

Not getting land creates a problem for industry. Loss of land creates multiple of worries for the project-affected households. While they are told about the opportunities to be made available to them by industry, they see the risks and insecurities that will accompany the promised opportunities. Parting with money is easy for the investors as that will come back to them in multiples, but parting with land is really difficult as that will never come back to the farmers.

The magnitude of displacement in Orissa can be assessed from the following facts which appeared in The Times of India (Bhubaneswar, October 6, 2009) relating to Arcelor Mittal’s proposed mega steel plant in the Keonjhar district of Orissa. The plant, to come up with an investment of Rs 40,000 crores, requires 7753.309 acres of land including 750 acres for township. government will provide 2847.502 acres and the rest 4905.807 acres have to be acquired from private landowners. Acquisition of land for the purpose is likely to displace 4000 families comprising 20,000 persons. Delay in land acquisition for the project has been caused by the opposition of the people. Tata Steel and Posco have delayed the launching of their steel projects for the same reason.

Displacement has certain visible costs and can be given a monetary dimension. Its invisible costs like family crisis, social dislocations, emotional crisis and disturbances, loss of community attachments and local culture and the threat perceptions can be imagined but can- not be calculated. Making investments in steel may be easier than building schools and equipping them with the right kind of teachers. It is still more difficult to create a sustainable source of income and livelihood for the affected people. Plants can be set up but the wasted Common Property Resources (CPRs) cannot be created. Once displaced, people may find alternative ways of earning a living but will not forget the trauma of separation from their ancestral land.

Overshadowing all the cost and benefits is the future of children of the displaced families. It is their education, their health, their minds and their physical well-being which are likely to suffer the worst. It requires sincere efforts to resettle the students once they have been dislocated and disturbed. The real problem will be in restoring the academic environment for the students and instilling in them the joy of reading after the change which they had to accept reluctantly.

Industries interested in providing schools and health facilities for the displaced families have to address such sensitive aspects of these problems. Yet there may be an undercurrent of fear of social disorders in the minds of the displaced households. Under these circumstances the future of these people and their children would hang by the thread depending on so many unknown factors.

Orissa is a poor State. It naturally will give priority to economic development. Industriali-sation will remain an unfinished business here unless these problems are addressed and dealt with tact and understanding to ensure the desired outcomes in terms of development and inclusive growth. n


Government of Orissa, (2009), Economic Survey, 2008-09.

Government of Orissa, (2008) Economic Survey, 2007-08.

Government of Orissa, (2006) Orissa Resettlement And Rehabilitation Policy.

Panda, P.C. (2000), Political Economy of Rural Poverty, Ph.D Thesis, Utkal University (Unpublished).

The Times of India (2009), Bhubaneswar edition, October 6.

UN World Food Programme (2008), Food Security Atlas of Rural Orissa, Institute of Human Development, New Delhi.

Sudhakar Panda is a former Professor of Economics, Utkal University, Bhubaneswar, and Sikta Pati is an Adjunct Professor, School of Management, KIIT University, Bhubaneswar.

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