Showing posts with label HDI. Show all posts
Showing posts with label HDI. Show all posts

Thursday, August 09, 2012

If only wishes were horses and MoUs were industries

A lot has been said and done, but the reality is far from what was promised. To continue on growth track Orissa needs to ensure implementation of the promises, says Deepak Ranjan Patra

A couple of decades ago, a lesser heard state in India suddenly hit the headlines in national media for not so good reasons; hunger deaths and child selling. Now after many years, it’s again making headlines, but for some good reasons. As per figures released by Central Statistical Organisation (CSO), Orissa grew 8.74% between 2004-05 and 2008-09 after clocking a monumental growth rate of 9.2% during the Tenth Five Year Plan. And why not, after all, one of the front runners for the best Chief Minister spot, Naveen Patnaik, has been working on turning the wheels. Sample this; the state government has signed as many as 79 Memorandum of Understandings (MoUs) with companies operating both from India and abroad proposing an investment inflow of over Rs.36 billion. Anyone seeing those facts would certainly be sure that the state is now heading for some serious economic growth. But only if wishes were horses and MoUs were industries.

For a reality check, Orissa’s Human Development Index (HDI) ratings, the yardstick used to measure citizens’ access to knowledge, health, food and nutritional security, is at a nadir of 0.345 currently. Families living below the poverty line (BPL) number over 40 lakh, and the figure is rising with every passing year. According to a survey conducted in 2007-08, over 80% of households in 15 districts had a very low standard of living. Further, over 50% households in 18 districts were BPL cardholders, the figure stands over 60% in eight of these districts, clearly indicating the fact that though the stories of an Orissa with undernourished children have given away the centre stage to business tycoons signing MoUs in their scintillating corporate attire, the truth still lives somewhere around the story that rocked the world during 1980s. The growth so far is more illusionary than real. Panchanan Kanoongo, Former Finance Minister of the state says to B&E, “Growth exists only on paper at the state secretariat.” Harsh statements surely. But anyone who has been in touch with the developments in the state can easily point out the sluggish speed at which the industries are being set up. Take South Korean steel major POSCO’s proposed Rs.520 billion mega steel plant in the state. Supposedly the biggest FDI deal in the country, the project was signed way back in 2006, but even today the company has not been able to grab the land designated for the project. Many may blame this as yet another case of land acquisition issue, but the problem has been going on for over 2 years now. What is that the government has done so far to resolve the issue and allow the project to get going? Nothing, at least not officially!

While every one looks interested in fulfilling their political dreams fulfilled by fuelling the loggerhead between the supporters and opponents of the project, the poor people of the area, who could have actually been benefited from the project, are just falling prey to ill directed fights. Despite that, there is no genuine effort from the government to resolve the issue.

However, in most of the projects where the companies are facing opposition from the locals, be it L. N. Mittal’s proposed steel plant in Keonjhar or the one proposed by Tata in Kalinga Nagar, a major reason has been lack of proper communication of the benefits to the people. Lack of a proper communication from the government’s side allows swindlers to deceive people and satisfy their political agenda. Not denying the fact, Raghunath Mohanty, Cabinet Minister for Industries, Orissa, tells B&E, “Rehabilitation packages offered under these proposed projects are really lucrative. Sooner we manage to convey this to the people and make them understand, easier it will be for us to resolve the problems at the project sites.” The case is more or less similar in all such projects where land acquisition is an issue. But, what about the other projects? Out of the 79 MoUs signed, only 33 projects have started operation and that too just partially. The problems are certainly from both the sides, government as well as the companies. Though the government has started a single window system to facilitate clearance from various authorities, and has made clearance time bound, but how well the system works, is certainly something that needs a clarification. Most of the projects for which MoUs were signed a few years ago are still stuck with some or other government department awaiting clearance. As a source from Aditya Birla Group’s Rengali-Lapanga Aluminium smelter project informs, “The company had already deposited the required money for acquisition and hand over the land with the government about a year ago, but still there is no effort from the government’s side to handover the land. And for this, the proposed plant with 2.6 million tonne capacity and a 650 MW captive power plant is yet to start operation.”

The situation for Vedanta’s Alumina plant in Lanjigarh is also facing a similar kind of situation. Though the plant has partially started operation, Vedanta is yet to get an approval from the environmental and forest agencies to be able to access the local mines. At present the company is continuing its operations by importing the required raw materials from its mines situated outside the state.


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Friday, July 13, 2012

Absoulte GDP and GDP growth rates are often correlated to overall economic prosperity of nations.

Jeffrey D. Sachs, in his article titled Economics of Happiness, writes, “In the US, GNP has risen sharply in the past 40 years, but happiness has not. Instead, single-minded pursuit of GNP has led to great inequalities of wealth and power, fueled the growth of a vast underclass, trapped millions of children in poverty and caused serious environmental degradation”. This can be corroborated with the recent Wall Street Protests that speak volumes about the gloomy social condition of the US. So much so that a time series data analysis shows how the rich-poor divide has widen in the county and how the economic policies (that eventually escalated the economic growth) were always inclined towards the richest 1% of the population. Today, America is one of the riskiest nations with a high intentional homicide rate (4.8, more than a country like Bangladesh) and crime rate (the national crime rate was 3466 crimes per 100,000 residents as of 2009). The same goes for Norway. Norway boasts of having the world second highest per capita income ($84,144 per year) and tops the UNDP’s Human Development Score card. But it again fails to defend its reputation on the Happy Planet Index (wherein it ranks 88). Norway’s government is struggling with an increasing use of weapons during thefts & robberies and also an increasing crime rate.

One country that is trying to desist from the GDP obsession and promote Gross National Happiness is Bhutan. The country is trying to achieve overall happiness by adopting policies that promote culture, mental health, community development and social growth. Also, the nations that top the Happy Planet Index do not necessarily have very impressive economic variables. One such nation is Costa Rica. It has a per capita income of just $7,701, but has one of the highest life satisfaction rates and one of the longest life expectancy rates in world. Similarly, Cuba scores poorly on HDI and has merely $5,565 per year as per capita income, but fares better than the crony capitalists of the world. The intentional homicide rate is lower than the richest countries, the Gini Coefficent is better than many developed countries and life expectancy rates are better than US. Costa Rica’s rising education levels allow it to rank higher than US in the World Economic Forum gender gap index. Even the Environmental Performance Index ranks Costa Rica significantly better than other developed nations.

A disaster (like the recent recession) does provides avenues for economic development, but it isn’t a meaningful end in itself. Most countries that try to achieve high growth rates at the cost of social well-being fail to create an ambience for holistic social development – and revolts going on across the developed world substantiate this. It’s imperative for nations to reconsider how they calculate, or even benchmark overall prosperity.



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