words fail me. it is now, sigh, 0.11%. that is what a bangalore-based company called strategic outsourcing services has bid to clinch a tender to become the common banking correspondent for all public sector banks in orissa.
about a month ago, i wrote about a controversial plan by the finance ministry to split the country into 20 clusters, and to appoint a common banking correspondent company for all public sector banks in each. to understand the attendant implications, please click here. yesterday, the second tender in this series was awarded. it went to fino. which is now the common BC for all of jharkhand and parts of bihar. as with the first tender, the bid surprised industry folks. the whole story here.
(this post was initially written for http://www.theotherindia.org. that site has since been shuttered. and i thought i would repost this article here. the year spent freelancing was the start of my introduction to india. and this was one of the more seminal trips. backpacking across the mining districts of orissa taking a first-hand look at industrialisation and local communities, there is a lot i saw and learnt.)
I have just returned from a ten day trip to Orissa. Eight of those days were spent travelling through Kalahandi, Sundargarh and Keonjhar. Each of these districts is seeing a huge wave of industrialisation — mainly power plants, sponge iron plants, and mining for ore and coal. And it seems to me that this industrialisation will increase poverty — not reduce it. And, for that reason, showdowns between the state and its people, just like the one at Kalinga Nagar, are on the cards.
For one, despite all the promises of employment, very few of the displaced are getting jobs in the plants coming up. The companies prefer to hire workers from other states. Smelting is dangerous work. Fifteen people had died last year alone, NGOs in Jharsuguda told me, while working at one of the largest smelters in this town. Knowing that agitations would follow the death of any local in their plant, the companies prefer to hire migrants. By doing that, all they have to do is ship ex-gratia money across to the worker’s family and tell them to hush it up. All this was subsequently independently corroborated in a conversation with a contractor who supplies labour to that plant.
What about the compensation money? Most of the affected villagers I spoke to owned between 2-3 acres of land. Compensation rates ranged between 1-2 lakhs. Very few villagers have been able to convert that money into new livelihoods. Most of the people living in this area are tribals. Take Jambkhani, this village near Gopalpur is under threat from a proposed coal mining project of Bhushan Steel. The villagers practise subsistence agriculture (paddy) during the rains. The rest of the year, they barter forest produce for household provisions. How do such people negotiate for appropriate compensation? If the largest denomination i have seen in my life is a fifty rupee note, I might think that Rs 80,000 will last me a lifetime. In one village where 12 displaced people had settled, revealed that 4 were dead (of drinking). 6 were destitute (they had spent all their money on bikes and so on). One had invested his money in chit funds and lost it all. It was the 12th who had managed to make the transition. He had opened a pan shop.
Given the poor utilisation of compensation monies, a familiar story is playing out in this state. Companies follow a tiered structure while making their compensations. X rupees for land. A higher rate than that if it is buying a villager’s land and house. What companies are doing is buying out just the land, leaving the villagers with the island of land on which their house sits.
What happens next is predictable. A villager runs out of money. Panics. Asks the company to pay him something for his house. Gets something in what is suddenly a buyer’s market. And then wonders what to do next. Urban migration is not much of an option in this nitwitted state. There is precious little industry to speak of. And God knows that this country is running out of woods where people can settle.
It is a quandary that the landless face as well. Only difference is that they get no compensation at all. The new R&R policy envisages a Rs 10,000 payment to the landless as well. But for now, they get no aid. They are just told to pack up and leave.
And then, there is a third lot of people who will be displaced as well. These are people who live next to the plant. It is pertinent to mention here that sponge iron plants are among the most polluting in the world. Inhale their gases for three years and chances are you will come down with cancer. If you follow the centre’s guidelines, there would be a ten kilometre space between two sponge iron plants.
One village I went to had three sponge iron plants within a single kilometre. One to the west. The second in the middle. With houses less than ten metres way from its fence. And the third one another 500 metres to the north-east. In this village, the trees were black. So was the land. The kids and the elderly were down with asthma. The cattle were dying. In the same district, at another village, Nepaj, rules had been flouted even more egregiously. 14 sponge iron plants had come up within 5 kms of each other.
Owing to the massive explosion in sponge iron plants in the country, as the head of the local sponge iron association in Rourkela told me, there is a glut right now. As people wait for demand to catch up again, they are cutting down on costs to stay afloat till then. And one form of cost cutting is to shut off the electricity intensive emissions controlling systems – the electrostatic precipitators. Pollution is bound to be high.
All this is a failure of the state. It is negotiating on behalf of the companies with the people. Not the other way around. As for the NGOs, a lot of them were fledgeling, set up by the locals, and all fighting to stave the companies off — not focusing on managing the aftermath of dislocation.
I went in assuming that industrialization, while, probably calamitous for the environment, would be helping the state with poverty reduction. But now, looking around, I am not so sure. There isn’t any direct employment. I am still trying to gauge the potential for indirect employment. But I am not sure if it is the displaced who will end up capitalising on that opportunity. Ask what they plan to do with the money and most of them will say they will start a business. What business, you ask, and there are no further answers. I am now trying to understand if the third ray of hope – that the rising state GDP will create capital that can be used to drive an aggressive rural development agenda – can deliver.
Even here, there is a problem. This urgency to sign MoUs is inexplicable. India follows a rudimentary system for pricing its ore that doesn’t link the government’s royalties to market prices. the result: Orissa makes rs 25 per ton of iron ore that is extracted from its mines. The market rate? Anywhere between Rs 1,400-1,800. Surely, in such a situation, the state would be better placed to wait till the country finishes overhauling its ore pricing laws (the review is under way right now).
What is more certain is that the people are drawing a line in the sand. As I traveled into more industrialised districts, the people were increasingly combative. The first few villagers I met spoke in terms of petitioning the state for jobs and alternative land. As I moved north, towards Kalahandi, that attitude vanished. The villagers felt that the political parties were not interested (the industry is their biggest funder now), appeals to the administration have gone nowhere (there are cases of collectors forcing sarpanchs to give their consent for plants to come up near their villages; pollution continues unabated, thanks to bribery; peaceful protesters have been arrested), the process of environmental clearances itself has not been followed (the villagers are not told about the public hearings — an essential part of the entire clearance process. in one case, the minutes of the proceedings were doctored to make it appear that the villagers wanted the projects), the law itself (with most lawyers in this area unfamiliar with environmental tort) has been dismissing villagers’ petitions to stop the plants.
Talking to the NGOs, to the local media, the sense I got was that naxalism will rear its head in this state as well. We do appear to be heading for a flashpoint. At one end, there are the villagers, unwilling to accept such industrialisation. Think of Kalinganagar here. The tribals there have successfully held off the state for months now. At the other end, there is Naveen Patnaik, under pressure from the PMO, from the Plancom, from the companies, his own party, with his state’s reputation as an global mining destination at stake. There will be a showdown. It will be bloody for the tribals in the short run. In the longer run, i wonder how the BJD will fare in the elections. So far, such protests have been isolated instances in this state. But now, with every district seeing displacements, a groundswell of protest is starting to take shape.