Recently, Orissa has appeared on the investment map of India with a long list of investment proposals, largely backed by foreign investors. Historically, Orissa had the image of a "backward state" (which is still debatable) but this old image has now been destroyed by the sheer amount of new investment proposals which it has attracted, since 1993, with the announcement of new power, infrastructure and mining policies to woo foreign and domestic private investments.

During 1995-96, Orissa received the largest amount of private investments in India, both foreignand domestic, followed by Gujarat, Karnataka and Maharashtra. in the post-liberalisation period, Orissa ranks sixth in foreign investment, having attracted Rs 97,300 crore of investments in the last five years.

Why Orissa? Although some of the new proposals are yet to materialise, how can Orissa, a "backward" state, attract such mega investments? The majority of new projects are solely attracted by the resource wealth of Orissa which is beneath its surface, mineral resources, and therefore, are located in only mineral-rich regions.

Orissa has 90 per cent of India's chrome ore and nickel reserves; 70 per cent of bauxite; and 24 per cent of coal reserves. With no other state having such abundance of natural resources, the TNCs and big business houses have no option but to set up steel, aluminium and coal-based power projects in Orissa only. Besides, the state is offering exceptionally huge subsidies to investors, in the form of guarantees, tax concessions and investment subsidy. The abundance of cheaplabour further makes it an investor-friendly state.

Who benefits, who loses? As far as economic benefits of new investments and privatisation programmes are concerned, the state government boasts that the new investments will spur growth which, in turn, will help in poverty alleviation. But this argument finds little evidence in Orissa (and elsewhere) as growth in itself does not promise to "trickle-down" to the poor.

But this argument too has no basis in reality. Although the state government has withdrawn from big investments in infrastructure this has not led to commensurate increase in the allocations to social sector programmes. There is no denying the fact that Orissa badly needs massive financial resources and better delivery systems to uplift the living standards of its population as its per capita income is far below the national average.

Instead of taxing the rich for raising adequate financial resources to support anti-poverty programmes, the state government is offering more and moreconcessions to the rich, big business houses and TNCs for investments through tax exemptions, investment subsidies and guarantees.

Orissa need not offer huge subsidies to investors, involved in mineral related industries, as they have no other state in India to go to. No other Indian state can match the mineral resources of Orissa. By offering these subsidies to new investors, the state government has unnecessarily created a financial resource crunch which it plans to fill through the outright sale of public sector units and privatisation of basic services, which directly affects the poor as they do not have purchasing power to afford basic services.

Furthermore, Orissa's economy has always faced the problem of "capital flight" as the returns of industry and service sectors went to other states and were not ploughed back into the state. Now, this problem is further going to be accentuated as these new projects have substantial investments by transnational corporations and "capital flight" will not beonly restricted to other states within India but will also move out of the country. Thus, the long-term economic benefits of these investments are very much in doubt.

The job prospects are very bleak as many of new of the investments projects are heavily capital-intensive thus unlikely to create new jobs for the local population while the senior and managerial jobs in these projects are likely to be filled by persons outside the state. On the other hand the people whose lands will be taken away to set up these projects will face a bleak future.

Not to talk of consulting people or even finding alternative sources of livelihood for these people, the state government has not even bothered to examine the extent of negative impacts on their lives which raises the basic question - development for whom?

There are adverse environmental consequences as well. According to a recent study by the Institute for Policy Studies (IPS), greenhouse emissions coming alone from Orissa is one per cent of the globalemissions.

The study further points out that Orissa's industries and coal-fired power plants will be emitting 164 million tons of carbon dioxide annually by the year 2005, or the equivalent of about three per cent of the projected growth in man-made greenhouse gases anticipated globally over the next decade. In addition, Orissa's industrialisation will release toxic and potent global warming agents equivalent to eight million tons of carbon dioxide emissions.

Already, existing plants have caused widespread land degradation and water contamination in the regions thereby affecting the health and livelihood of people. The East India Refinery Project at Paradeep has come under close scrutiny by environmentalists who argue that this refinery will adversely affect the coastal forest areas by its emissions and will also endanger the rare species of Olive Ridley Turtles which visit every winter in the area.

Moreover, one wonders what is the need of adding new power projects in the state when Orissa is alreadypower surplus. Power is a commodity that cannot be stored, it has to be distributed immediately. As the present national grid system is not suited to import power from Orissa, it makes no sense to have more plants to generate extra power without being able to use it.

Paradise for a few, hell for millions: given the kind of scenario fast emerging, we will be soon witnessing two kinds of Orissa. One, small in numbers, globally linked with international capital and trade through super-highways, telecom, corporate farming and infrastructure; and the other, consisting of millions of poor people, struggling to survive in increasingly inhuman and polluted environment.

Third World Network Features