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Forward March Of Capitalism In Orissa

By Sarbeswar Sahoo

11 June, 2007

The New Year 2006 greeted the people of the state of Orissa, India with the sounds of bullets and shedding of blood, leaving 12 people dead and creating a sense of fear and insecurity among others on 2nd January. This barbaric and dishonorable act committed against ordinary citizens in the name of modernization and development reflects the height of capitalism in Orissa. The questions here are, is Orissa a capitalist state? And, why do people resist the industrialization ventures of the government, if it aims to bring development? Although the first question seems less important, is inseparably related to the second. Despite of having more than 40 percent of its population below the poverty line, the historical trajectory of development and policies of the government of Orissa reflect the incessant pursuit of profit over the general interest of the people. Capitalism is marching forward in the name of development, and generating poverty and inequality as its intrinsic logic. Given this background, the paper analyses briefly the historical trajectory of development in Orissa and its implications for the people in the context of firing at Kalinga Nagar on the issues of industrialization, displacement and rehabilitation.

Due to the unequal allocation of resources, administrative apathy, and central neglect, Orissa has been suffering from extreme poverty and underdevelopment in comparison to other Indian states. In his eagerness to bring development to Orissa the then chief minister, Biju Patnaik openly endorsed the new economic policy and invited investment from the country and overseas to set up steel plants, power plants, and refineries which projected Orissa as a dynamically enterprising, liberalizing, and privatizing state. By virtue of cheap labour and low transportation costs it attracted the largest amount of private sector investment during 1995-96, followed by Gujarat, Karnataka, and Maharastra, and emerged as one of the major economic power in the Asia-Pacific region.

Recently, due to Chief Minister Navin Patnaik’s open invitation to the corporate bodies to get the mining rights on massive iron and bauxite reserves of the state, Orissa optimistically expects a Rs. 1,00,000 crore bonanza over the next five-to-seven years, which is highest in comparison to any of the Indian states. Taking into account the growing demand for steel in international market and its commitment towards industrialization and development, the present Biju Janata Dal-Bharatiya Janata Party alliance government has signed up 43 memoranda of understanding for steel plants and 3 for aluminum refineries so far. The state also has proposed to build two more ports in Dhamra (L&T and Tata Steel) and Gopalpur (global bid on build-own-operate-transfer terms) to provide investors with a gateway to international trade. Thus, Orissa has fast emerged as a major site for foreign direct investment and free market capitalism.

The question then is why do people resist the development projects undertaken by the state? In order to understand the politics of resistance, we need to understand the implications of capitalist development for the people of Orissa and especially the displaced population? Grounded on Western rationalism, the capitalist mode of profit oriented development and modern industrial growth has not only perceived nature as ‘external’ to society and thus, an infinitely exploitable domain, but also transformed the people, often against their will, into a dispossessed working class. In the name of development, people have been pushed off the land; their forests and water have been taken over by the state and the market, so that they have been deprived of everything except their labour power. Coercive state power has impoverished the people and, in this context, resistance is seen mainly as a reflex action prompted by being driven over the edge by economic and political deprivation.

The state of Orissa, which seems to be acting as the managing agent of the corporate giants, is deliberately flouting the constitutional provisions of the Panchayats Extension to the Scheduled Areas (PESA) Act, 1996. The study group of the CSD in 1999 found that there is no evidence of consultation of gram sabha by the state related to land acquisition and R and R package. The local administration in the region in league with the company does not seem to have any respect for and commitment to the rule of law, which it is supposed to uphold. Large-scale industrial and infrastructural projects have displaced the tribals from their productive assets (particularly land, forest) and homes.

The Land Acquisition Act of 1894 (now amended in 1984) empowers the government to acquire private lands and properties in ‘public interest’. Statistical figures on Orissa indicate that till 2000, about 20 lakh people have been directly affected by development projects in varying degrees out of which about 5 lakh have been physically displaced losing their home and hearth from their original habitat. Mining in Orissa has created "an estimated 50,000 environmental refugees," according to news reports. The government of India (1994) admits that 15.5 million people have been displaced by various development projects, out of which 74.52 percent displaced people were still awaiting rehabilitation. This unsuccessful rehabilitation policy also stands as one of the major reasons of resistance of the development projects.

Establishment of industrial projects, felling trees to supply timber for laying railway tracks, building towns and collecting raw material for industries gave birth to a process of deforestation. The destruction of forests have unleashed a situation where more and more people are being displaced from their communities and traditional ways of life and resulted in an insecure livelihood for the tribal and indigenous communities in the hilly areas and tribal belts of Orissa. Displacement dismantled the existing socio-cultural fabric and economic base of the displaced families, which has been built over several centuries and generations. It dispersed and fragmented communities, dismantled patterns of social organization and interpersonal ties; kinship groups became scattered as well. It also increased the drop out rates and caused a wider loss to the children of the displaced tribals and denied their basic right to education and literacy.

The new policies of development in consonance with the needs of the market forces have been forcing the indigenous people to leave their traditional rights of community (common property) resources and minor forest produces. In course of time, tribal lands and forests became the property of the state, denying them from their right to employment, work and livelihood. Nature turned into property. Instead of protecting the interest of the people, protection of the interest of the multinationals and profit occupied the central place in every move of progress by the state. This process of development by the state has brought disentitlement for the people, where the tribals are gradually denied access to the support system of their livelihood.

As Cernea (2000) has argued, capitalist development projects have generated various impoverishment risks for the displaced people. These are: (1) landlessness, (2) joblessness, (3) homelessness, (4) marginalization, (5) increased morbidity and mortality, (6) food insecurity, (7) loss of access to common property, and (8) social discrimination. To this list Courtland-Robinson (2003) added two more: (9) loss of access to community services, (10) violation of human rights. A.K. Mahapatra (1996) added the eleventh point: (11) loss of educational opportunities.

It is evident from the above that the government’s patrimonial and profit oriented policies by permitting corporations for extracting mineral wealth indiscriminately and pushing thousands of people into destitution reveal the exploitative and exclusionary development agenda and unstoppable forward march capitalism in Orissa. The primacy of profit over people has severely violated the human rights of the people. The democratic state has given rise to a kind of Hobbesian ‘state of nature’ where a sense of fear, insecurity, and lack of freedom rule over society. The Hegelian state, which ensures and legitimizes the freedom in civil society and protects the citizens, is now using its sovereign powers to protect the MNCs and TNCs to crush the interests of the citizens. The citizens are turned into refugees and aliens in their own country, the ‘foreigners’ and ‘aliens’, because of the capital they possess, are treated more than citizens. And, civil society as a sphere of freedom has turned into a domain of the oppressed.


1. Sahoo, Sarbeswar (2005) ‘Tribal Displacement and Human Rights Violation in Orissa’, Social Action, April-June, 2005, Vol. 55, No. 2

2. Cernea, M. (2000) ‘Risks, Safeguards, and Reconstruction: A Model for Population Displacement and Resettlement’, Economic and Political Weakly, October 7

3. Mitra, A., Gupta, A. and Nitya, V. (2004) ‘The Hot New States for Business’, Business Today, November 21, pp. 120-128

4. Das, Prafulla (2006) ‘Churning in Orissa’, The Hindu, January 13

Sarbeswar Sahoo is a PhD Candidate, Department of Sociology, National University of Singapore,,


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