T N Ninan: 'Follow the money'

To understand the dynamics of the mining business in Orissa, just take Deep Throat’s advice and follow the money. For starters, consider the state government. If Vedanta’s expanded aluminium project goes through, the state government stands to gain about Rs 1,200 crore per year in different kinds of tax revenues. And if the Posco steel plant, held up for many years by land acquisition battles, gets up and running, Naveen Patnaik’s government hopes to get Rs 2,200 crore annually. As much is expected from Tata Steel’s Kalinganagar steel plant. Put the three together, and the Orissa government’s tax stake in the projects is well over Rs 5,000 crore per year. This is on top of the money that the state already gets from various mining industries.

The state’s total tax revenue (not counting money that comes from the Centre) is barely Rs 10,000 crore, so what is at stake is a 50 per cent increase in tax collection. Add the existing revenue from mining industries (about Rs 2,000 crore), and the state could be getting half its “own” revenue from extraction industries. For a state that is deep in debt, the money from these projects can be a life-saver. Enough to justify the political risk of upsetting thousands of people who will be ousted from their lands, most of whom will not get any jobs in the projects that are to come up.

So, if you wonder why the state’s officials ignored the violation of national laws to facilitate the Vedanta aluminium project, think of the money. In a state that has under its soil a sixth of India’s total mineral resources, extraction industries are a lifeline that must be grabbed with both hands.

If the state expects a windfall, why does it not share the take with the people whose lives are disrupted, indeed torn apart, by the projects coming up? Looked at from a people’s perspective, the revenue from the mining industries, present and planned, would be close to Rs 10,000 each year for every family in Orissa. The government could pay all displaced people pensions for life, and the state would still have to cough up only a tiny portion of its take.

The Patnaik government will say that it has a generous relief and rehabilitation policy: handsome land price settlements, alternative housing, education and training, and a guaranteed job for every displaced family. But little of this is reflected in the Saxena report on the Kondh tribals of Niyamgiri; one of the complaints from the tribals is that none of them has got a job in the aluminium factory.

This picture varies across states. The Gujarat government could give Tata Motors land for its Nano factory, for a song, because the land already belonged to the government; the state will gain jobs and revenue, and build an ancillary industry base. The Punjab government has now offered free land to the Indian School of Business, for a new campus. And the Mayawati government in Uttar Pradesh is said to be displacing no fewer than 1.4 million people, for a planned expressway; it is no wonder that the farmers marched on Delhi.

The policy of “take from the poor and gift it to the rich” has brought matters to a boil. Land acquisition must be on fair terms; the dispossessed have a prior claim on state resources; laws must be rewritten where necessary (and enforced); mines must not be given out free to businessmen, but bid for in auctions, as with oil and gas blocks; and environmental damage to water and forestry sources must be taken into account. The free ride for governments and industry should end.