Influence of mining corporations on policy makers 'leading to' erosion of democracy in Odisha

By Bhabani Shankar Nayak*

Odisha is rich in high-quality natural resources, including iron, bauxite, chromite, and manganese ore, as well as a variety of other valuable minerals like coal, limestone, dolomite, tin, nickel, vanadium, lead, graphite, gold, and gemstones. This resource-laden state is responsible for 57% of India’s iron ore production, hosting over 60 operational mines and more than 150 square kilometers under exploration for further mineral deposits.

Unfortunately, the local population does not share in the benefits of these vast natural resources; instead, many of the poorest communities reside in the very regions that are rich in minerals. This situation underscores the severe disparity in wealth distribution stemming from these natural assets, creating a "paradox of plenty" that perpetuates poverty and hunger, both of which are frequently reported at national and international levels.

Since gaining independence, Odisha has favored a pro-business approach alongside mining-led industrialization. Various political parties, including the Congress, Swatantra Party, Janata Dal, Janata Party, Biju Janata Dal (BJD), and Bharatiya Janata Party (BJP), have consistently supported mining corporations under the guise of promoting economic growth. Sadly, rather than foster equitable economic development, this has resulted in mining corporations undermining democratic processes and transforming the resource-rich state into one suffering from a resource curse.

The rent-seeking behavior of the Odisha government has not only stalled economic or human development but has also fortified the influence of caste, class, and elite groups, allowing them to maintain control over resources and governance. This has fostered a neopatrimonial relationship characterized by the collusion of the state, government, and mining entities, thereby cementing the power of these corporations at the expense of fair development.

Consequently, mining corporations exert significant control over democracy in Odisha, contributing to ongoing political and economic crises for the state's residents. The "Performance Audit of Systems and Controls in Assessment and Collection of Revenue from Major Minerals for the Year Ended March 2022 (Report No. 6 of 2024)" by the Comptroller and Auditor General of India (CAG) reveals that the state has facilitated mining corporations' interests, leading to severe losses in mining revenue.

The state treasury has suffered tremendously due to the undervaluation of mineral ores by the Odisha government. This excessive support for private mining enterprises has been accompanied by significant political contributions, with mining corporations in Odisha donating ₹601 crore in electoral bonds to various political parties. Major political players, including the BJD, BJP, and Congress, have all benefited from these contributions, with the BJD receiving ₹453 crore and the BJP receiving ₹145 crore from just six active mining companies.

Who is concerned about the ₹22,392 crore loss in mining revenue to the Odisha treasury? Who is addressing the ₹10,294 crore lost due to ore undervaluation? Who prioritizes the welfare of the people and environment in Odisha's mining regions? Mainstream political parties, mining companies, and ruling and opposition elites collaborate to safeguard their mutual interests, while ordinary citizens in Odisha endure ongoing unemployment, poverty, hunger, underdevelopment, and health issues.

Successive governments have provided uninterrupted support to mining firms and extractive industries, operating under the assumption that governance is intended to serve these corporations rather than the people of Odisha. This collusion not only erodes democracy but also undermines the essential conditions for genuine democratic governance within the state.

Both the ruling and opposition parties benefit from political donations which bolster mining interests

The intertwining of mining corporations with politics is eroding democratic institutions in Odisha. Both the ruling and opposition parties benefit from political donations which bolster mining interests. This crony capitalism, driven by mining companies, has detrimental impacts on the state’s economy, environment, and democratic integrity. While the BJP recently unseated the BJD after more than two decades in power, their policies regarding mining are strikingly similar.

Both parties demonstrate an unwavering commitment to the interests of mining corporations. Newly appointed Chief Minister Mr. Mohan Charan Majhi, despite hailing from a tribal background, appears unfazed by the displacement of tribal communities due to mining, actively facilitating the transfer of forest land and tribal territories to mining operations without hesitation.

Political leaders across the spectrum are influenced by mining corporations, which establish a foundation for pro-mining stances through regular financial incentives, regardless of party affiliation. In Odisha, mining has become a risk-free endeavor, undeterred by regulation. Protecting land and natural resources, as well as the livelihoods that depend on them, is vital for peace and prosperity in the state.

History demonstrates that mining-led industrial growth does not eradicate poverty or hunger. Instead, fostering cooperative and equitable management of natural resources can significantly alleviate these issues in Odisha. In light of this, the people of Odisha must advocate for a new political paradigm that positions them as stakeholders and custodians of the state's mineral wealth.

The initial step involves mobilizing the workforce to challenge mining corporations and dismantle their political influence. Advocating for radical alternative politics in Odisha necessitates policies that promote equitable resource distribution while emphasizing principles of equality, justice, and liberty as enshrined in the Indian Constitution.

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*Scholar based in UK

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