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Industrialisation of Orissa: Naveen's Politics of Disinvestments, De-industrialisation and Re-Industrialisation

"Naveen initiated the drive to close the state owned industries and made Orissa virtually an industry starved state pushing a large number of skilled people into the trauma of unemployment at a middle age...The consecutive second term started with high sounding MOU drama. By now, over 50 MOUs have been signed with big corporate houses like TATA, POSCO, Arcelor-Mittal etc."

Basudev Mahapatra : July 2, 2008

Naveen appeared in Orissa politics as the heir of Orissa’s pride icon Biju Pattnaik in the year 1997 and was elected as MP from Aska parliamentary constituency. While in the campaign, Naveen came across people of Orissa living in the remote villages of one of its poor districts like Ganjam. Impressed by the meadows of the rural Orissa Naveen was amazed to see and feel the respect among the people for his father Biju Pattnaik who enjoyed immortality in the mind and hearts of the poor folks of Orissa, as he told reporters then. Looking at the misery of people, Naveen made lots of promises to work for the development of the poor people of Aska. Naveen won the by-election with a thumping majority most of what came as sympathy vote.

In the end of 1997, Biju Janata Dal (BJD) was formed as an regional party by some JD leaders in Orissa who claimed to have Biju political legacy behind them and to cash upon the Biju legacy factor in the next general poll, Naveen was put as the leader of the party.

In a few years of his entry into politics Naveen first displayed his political maturity by putting the then BJD mastermind Bijay Mohapatra away from contesting 2000 assembly election in such a manner that others started apprehending his further moves. The immediate next move after he became Chief Minister was sacking of three ministers from his cabinet on irregularities and corruption charges. His first term ended with sacking of the then speaker on corruption charges.

The first term of Naveen Pattnaik as chief minister can better be termed as the phase of de-industrialisation of Orissa through a foreign agency dictated disinvestment drive. Many spinning mills across the state, Handloom Corporation, OTM, Konark TV, IPITRON were closed down forcibly leaving most of their workers unemployed in the middle of their career. Even many workers working in other government enterprises were asked to take voluntary retirement in the name of downsizing (right sizing what exactly government and international agencies call it) employee force. So thousands of skilled and productive workers were thrown away to suffer without any alternate employment. Although government, on the advices of DFID and some other affiliated consultant and agencies, ran a social safety net programme for rehabilitation of the workers thrown out of different organisations, it only benefited few training institutes and consultants than achieving the real target as most of these ousted employees are still living without any employment.

Closure of spinning mills and various industries didn’t cause harm only to the workers, it also had the worst impact on others who depended on the industries for their livelihood. The cotton farmers of Orissa have been the worst sufferers of Naveen’s disinvestments drive as all the spinning mills were closed. These farmers were depending on the spinning mills to sell their annual harvest. Now they are depending on outside traders and government agency to sell their cotton produce. Both the buyers have been unreliable and exploitative to the farmers in regard to procurement and payment. Distress sell has become a regular curse to the farmers to whom cotton farming is no more a feasible proposition.

Disinvestments and closure of PSU were executed in the name of minimising loss and checking outflow of money from the state exchequer. The vision and execution of disinvestments were all like rescuing a business organisation than implementation of programmes by a democratic body at the provincial level for the development of the citizens. Of course the state exchequer made a comfortable balance to show, but it could happen at the cost of the workers, farmers and artisans who lived with constant financial uncertainties.

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The term that gave Naveen a transparent image took Orissa back on the dream roads of two visionaries of Orissa – Madhusudan Das and Biju Pattnaik. Both the legendary personalities always dreamt of an Orissa with lots of indigenous as well as state promoted industries that create employment for most local youth and artisans. Madhu babu always wanted local resource based industries and local handicraft industries grow and make a market for themselves across the globe.

The next dreamer was Biju Pattnaik who wanted the local and agro-based industries grow by utilising the available infrastructure for commercial success. Starting from OTM – the Orissa brand of textiles to Oil Orissa and Orissa Handloom and craft Industries, Biju Babu always worked to see these industries run. Biju Babu played key role in setting large projects in Orissa like Rourkela Steel Plant, Paradeep Port, Nalco. Biju Pattnaik started OTM to provide direct employment to thousands of people and ensure a comfortable livelihood for the cotton farmers of Orissa. The cotton farmers used to supply their produce to the spinning mills who were producing threads for OTM. The idea was to make a chain of industries run and provide direct and indirect opportunities to thousands of people of Orissa. The handloom industry was promoted during his tenure to make it a profitable proposition for the rural artisans. The unfulfilled dream of Biju Pattnaik was a second major steel plant in Orissa after Rourkela Steel Plant. He invited Swaraj Paul to start a second steel plant in Orissa. The MOU was signed and foundation stone was laid. But because Swaraj Paul wanted to set a fully mechanised plant to make the industry profitable by employing less number of people, Biju Pattnaik didn’t allow the plant in Orissa.

Even if the information about Biju Babu’s invitation to POSCO for a plant in Orissa, as dropped by its Chairman during the MOU signing ceremony, was true, the trick of less employment for more profit would have been rejected by Biju Pattnaik who always wanted a second major steel plant that could generate maximum employment. Had he followed the Naveen government’s way of industrialisation, he would have set equal number of industries those days. But for him the interests of Orissa and its people were more important than the interests of corporate houses.

When Naveen became Chief Minister, almost all state run PSUs were making loss due to improper management, corruption and political interference that resulted in over employment. These problems could have been sorted out by putting strong and disciplined management bodies in the loss making enterprises and ensuring no interference from political leaders. Instead of doing so, Naveen initiated the drive to close the state owned industries on the advice of few foreign agencies and made Orissa virtually an industry starved state in India pushing a large number of skilled people into the trauma of unemployment at a middle age.

The state exchequer could save some money after closing down the state owned PSUs – claimed the then finance ministry. But, had it calculated the loss of productive man-hours Orissa incurred after sacking thousands of skilled workers engaged in the PSUs? Did it consider the cumulative loss of the investment state had made on those units? Hopefully not! It was all a quick calculation to get immediate political mileage required to win the next election. And it worked!

The consecutive second term started with high sounding MOU drama. By now, over 50 MOUs have been signed with big corporate houses like TATA, POSCO, Arcelor-Mittal etc. Orissa soon became the investment hub attracting corporate groups for an anticipated investment of 400000 crores of rupees. Corporate houses interested to invest in the state were promised for whatever they needed such as large patch of land, mining lease and infrastructure support.

While signing MoUs, nobody thought about the people and communities supposed to be affected by the projects, the livelihood issues and loss of other natural resources like land and forestry. The sites were chose and proposed by the companies as per their convenience or government agreed to provide them lands as per their requirement. Most of the large projects are planned over thousands of acres of farmland and forestland.

In the context of present market situation and anticipation of a severe food crisis across the globe, Orissa government’s decision for utilising thousands of acres of agricultural lands for Industrialisation would be taken as a blunder. Such huge land grabbing may lead to a grave problem not only for the State but also for the country as demand of food materials, vegetable and other agricultural products increases day by day with the growth of population. Institution of so many industries will force the markets grow as per the requirement of corporate professionals with a better buying capacity. Prices would go further up and shortage of materials would force the markets to import things at higher price. This proposition can be considered as an advantage only if we allow our agrarian community produce in abundance to fulfil the demands of the market. Then only the farmers, who have been starving since ages, would get a chance to make a good income and earn a better livelihood. The agriculture industry would once again flourish. As more than 70% people of Orissa are still dependent on agriculture, this would better solve the unemployment problem and take the state on the road of economic development.

But, unfortunately, people’s interests were neglected before corporate interests. The government didn’t even mind spraying bullets on people who opposed projects to safeguard their own rights. The catch-line of state government was Orissa needs industries to gain economic prosperity matching the growth of world economy. Nobody, including the parties in opposition, questioned – if industrialisation is the clue to development why a government led by the same CM decided to close down the so many state owned industries?


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