The incident occured last night at Mohanpada village, Additional Superintendent of Police, Sundergarh, Santosh Mohanty said.
The ex-sarpanch Nabakrishana alias Rabi Pradhan (60) sustained injuries in his left chest and legs and was rushed to Ispat General Hospital where his condition was stated to be serious, the officer said.
A joint team of CRPF and state police rushed to the area and intensified patrolling soon after the incident.
The Maoists fled from the scene, Mohanty said, adding that two female cadres identified as Asha alias Parbati Majhi, 23 and Sita alias Binati Majhi, 22, both belonging to Telkoi PS of Keonjhar district, stayed back and surrendered to the police.
"They were two active armed cadres of CPI(Maoist) and belong to the Kalinganagar Division. They were highly active in the border areas of Rourkela-Keonjhar-Angul-Deogarh. The reasons of their surrender are disillusionment and sexual harassment of the female cadres," Mohanty said.
Both had joined the organisation in December, 2009 and were working under Sushil alias Basant, Secretary of Kalinganagar Division.
"They have confessed to their crimes in Kalinganagar Division since 2009. They have also confessed that innocent tribals were being brutally butchered on the allegation that they were police informers," said Mohanty.
The incident took place when the Maoists were celebrating the Martyrs's Week.
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