The Foreign Direct Investment is going to increase in the country as reveled from Department of Industrial Policy and Promotion and Reserve Bank of India.
During last two years it has just been doubled to 4.48 billion dollar. It has been told by United Nations Conference on Trade and Development’s world investment report 2014 that among BRICS countries, India is the most favourable destination along with China. Asia remains the number one recipient region in the world focusing India. The countries joining with large share of FDI includes Mauritius, Singapur, The Nederland, Japan, the UK, the USA, Germany, Cyprus, France, Switzerland etc. The investments include sectors such as telecom, service, auto mobile, pharmaceuticals, computer, infrastructure, metal and metallurgical etc.
Odisha with its natural advantage of sea coast and mineral reserve has been most favorable attraction among the States in India. Already Odisha has one of the highest FDI ventures of the country by Posco with Rs 52,000 crore investment and many other private and State owned transnational corporations have decided to invest in Odisha mostly in power, steel, aluminum, cement, oil refinery and infrastructure etc.
The State Government is in process to build a world trade centre to promote global networking and attract investors. The recent development in mineral sector and land acquisition laws along with changes towards a more liberal FDI policy will pave the way for increase in FDI by mostly rich counties from Europe and America.
Odisha with resources of land, forest, water, mineral reserve, coal, thermal and hydro power and manpower has to plan to integrate its economy with the international economic trend and make best use of FDI for its economic growth which should be inclusive of all regions and social groups.
It has been told that the Central Government has been playing a major role in a federal structure like ours. There has been a continued move towards resource centralization by neglecting resource federalism as it is evident from Central legislations on SEZ, mines, water, forest and land management. Mostly in the context of FDI the Centre has to be more proactive in taking forward the investment plans. The State leadership has a very crucial role in implementation of economic plans. It has been observed that many of the infrastructure projects like railway, tele-communication, airports, roads and ports in Odisha have been delayed due to lack of investment. There has been no expansion of railway line as Khurda –Balangir track has been a distant dream in spite of huge hue and cry by all political parties. The condition of ports, railway stations, airports, bus stand and road ways in the State has not improved much in terms of quantity and qualitative service to meet the commercial need which should be the priority of the Government. The State should have plan for basic infrastructure development in rural and urban locations. But many of the State plans to develop railway infrastructure, such as Angul- Chhendipada rail corridor, Angul- Sukinda rail link and Daitari –Basapani link are mostly going to be used by the mineral-based industries.
The State Government’s investment strategy should focus on the continued regional imbalance in the State and make effort to mitigate this through strategic FDI with investment targeting more backward regions and including benefits to socially marginalized section in the region. But the State has to play an economic leadership role in planning the overall development of the region by linking with other projects. The most important concern is while allocating land, the Government should reserve land for agriculture and forest and mostly the waste land should be given for developmental projects. As it has been observed in many countries, mostly the wasteland, dry, rocky land has been given for development through FDI. Worldwide it is popular understanding that the irrigated land with multi crop facilities should not be given to industries. The coastal area land management should be carefully made to strike a balance between forest area and agricultural area.
In order to create a favorable environment for mega investment, the Government should increase social sector spending to bring change in the quality of life of the people in terms of education, good health, environment and communication beneficial to all social groups and classes across the region. On the one side while the State is going for FDI in mineral based industry, service and other sector, on the other side a vast majority of poor still live with basic minimum with illiteracy, low skill and extreme poverty without adequate State investment in social sector. Their traditional dependency on agriculture has not been changed due to lack of State investment in agriculture. So people in agriculture see FDI as a direct threat to their livelihood in the absence of an assured alternative source of employment. Their traditional dependency on agriculture has not changed due to lack of State investment in agriculture. The social sector development should be integral part of FDI as globally transnational corporations along with others have been contributing to reduce poverty, and in ensuring food security, health and education and reducing impact of climate change. The FDI in education and health sector should have affirmative action; otherwise the service will be limited to a few rich who can pay while a vast majority will be out of reach of getting quality health and education from private sector with diminishing State expenditure.
The State Government shows its favourable commitment to industry by acquiring land for them and providing infrastructural facility, constructing boundary wall and approach road and providing five year exemption in electricity duty, exemption for land conversation from agriculture to non agriculture use, allotment of raw materials, interest subsidy, VAT reimbursement, capital investment subsidy and all other service .
While the State is making policy in favor of transnational corporations the same has not reflected in case of protecting poor and marginalized from market forces without the State protection it is increasingly difficult for the poor to access market. The State resources such as land, forest, water and minerals under traditional control of people are going to be used by market forces with payment of mere one time compensation. The insignificant access of poor to resources, livelihood and employment with less State protection on rights and entitlements will lead to violence and political unrest manifested in from of people’s movements, protest and non cooperation which may not be a favorable condition for overall economic development.
It has been observed that in case of a number of projects in Odisha such as Kalinganagar, Paradip, Jharasuguda, Sundergarh, Koraput and Angul, the FDI has generated very less employment for the locals.
Barring a few, it is mostly the people outside the State who get employment and even some times the employees above manager level are outside the country. The managements of such mega corporations rarely keep coordination with the State Government and local administration. The State should have an employment policy for FDI projects which can protect the interest of the locals.
Many of the transnational corporations are not using the State infrastructure and alternatively building captives of their own. For example in case of Posco, the company has a plan to develop its own captive port though there are nine ports coming up with private investment in the 480km coast line of Odisha with a coastal highway connecting Digha to Vizag .
There have been protests against mega projects in different parts of the State mostly by local people but the local movements against mega projects are not reflecting the overall interest of the State as a whole. Rather these are more reflection of local aspirations without a State perspective.
(The writer is a researcher and rights activist who can be mailed at manasbbsr15@gmail.com)