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Resource centre on India's rural distress
 
 

A non-starter from the start by Girish Agrawal

Paan kheti [betel vine cultivation] is our lifeline…why does the government want to destroy it and force us into being labourers?” asked Niranjan, a 60-plus-year-old farmer who would lose his betel vines to the Posco steel project in Orissa. This is one of the questions that haunted us,when we, a group of US-based researchers interested in the new economy of globalised India, started looking into the Posco project. We had followed the development of several large projects in India, but earlier this year, when Posco was in the news due to the imminent expiry of the MoU between the company and Orissa, we were intrigued that even five years after the MoU had been signed, the project — widely celebrated as the single largest Foreign Direct Investment in India — had failed to make any headway at all.

The lofty claims of the government, that the project would contribute over a tenth of the total economy of the state, besides almost wiping away the widespread unemployment in Orissa were well-known to us. So why, we wondered, would there be such a strong resistance to this project on the ground? We wanted to go beyond the standard narratives of cash flow and revenues, and look at the actual impact of the project on the residents of Jagatsinghpur, Keonjhar and Sundergarh, where the steel plant, port and mines would be set up.

In pursuing these questions, we were surprised to discover that despite the size and scope of the project (encompassing the biggest steel plant in India, a captive port, extensive iron ore mines, two townships, a rail and road network and the largest ever industrial allocation of water in Orissa), the government had never really bothered to evaluate the impact of the project on the people, their environment or on the state’s economy.

While the government had made loud claims around tax revenues and increased employment—claims, which have never been substantiated — it uttered not a word as to the costs involved (social, economic and environmental), to help us compute how these compared. The environment assessments were still incomplete, the socio-economic data from the affected villages had been erroneously gathered, and all the economic claims came from one single study conducted by the National Council of Applied Economic Research — a study paid for and commissioned by Posco-India itself.

Our findings, published in the report, ‘Iron and Steal: The Posco-India Story’, describe the pivotal role played by the various institutions of the government in justifying and implementing the fundamentally flawed Posco project, many times in an undemocratic, illegal and coercive manner.

The claims of the government about benefits to the state are based on fudged numbers, sloppy calculations and flawed methodology. Coming in the wake of the divided ministry of environment and forests (MoEF) committee report on Posco, our research report adds a depressing dimension to the development policies being pursued across India in a mad rush to please global capital.

Not only is the Posco project illegal, as declared by the majority of the MoEF Posco panel, but the very justification of the project by the government is based on falsified information. Our report suggests that besides being illegal, the Posco project is fundamentally flawed from an economic standpoint. We conclude that the Posco project as it currently stands is poorly conceptualised. Its financial benefits are grossly exaggerated and its costs minimised. If carried forward in its current form, it will certainly result in the repetition of a process that is now known internationally as “growth without human development.” Overall, the country stands to lose rather than gain from the Posco project.

How does one hold the government accountable for such seemingly insane ‘development’ projects? As one of the villagers in Jagatsinghpur, where a strong and popular resistance to the Posco project exists, asked us: “Can somebody go to jail for breaking democracy?” This is surely the core question: what can the people do to bring to justice those who violate rudimentary democratic norms and procedures? When rights of capital take precedence over the rights of people, and when elected governments start to act as promoters and paid consultants for a private company, what recourse do people have?