If the Modi Government's flagship Make In India scheme is to be successful, it will have to take advantage of India's immense natural resources. Make in India depends on upstream support
Deep inside Kalahandi district in southern Odisha lies the town of lanjigarh, beyond it lie the Niyamgiri hills. Rich in high-grade bauxite ore, the source material for alumina which is turned into shiny aluminium, these hills should resonate with the sounds of whirring machines and the district should be a rich and prosperous one. Yet, despite the existence of a state-of-the-art alumina processing plant, the conveyor belt that is supposed to ferry ore to the plant for processing lies unfinished, its support beams rusting away. This is because the previous Government, which specialised in the politics of poverty, prevented a mine from being built there due to noise made by a small group of vocal activists concocting myths and working alongside left-wing extremists.
In a school built by Vedanta Resources, the company that built the huge plant alongside, which would otherwise be lying empty, hundreds of local tribal children get a proper English-medium education. Elsewhere, a hospital functions with full-fledged emergency resources. In the district which saw starvation deaths not so long ago in independent India, there has been a modicum of development. But, politicians who desire to be seen as cuddly teddy bears, preyed on local apprehensions about the plant and instead of addressing them, promptly declared that the plant should not be built because this ‘youthful’ leader’s sidekick said so. This was the compromise way of dealing with left-wing extremists whose success has come at the cost of keeping local populations in the dark, keeping them away from the world. Global activists living in the developed world cry of keeping indigenous cultures alive, yet life expectancy among the Adivasis in and around lanjigarh is around 40 years. In the hills that these activists promise should not be touched, education and healthcare are not options. It is very easy for people sitting in london with all the amenities of modern life to protest about an alumina refinery in the hills of Odisha.
As a result, India, which has the world’s fifth-largest reserves of bauxite, which should logically be a net exporter of aluminium and finished aluminium products, has for years remained an importer of aluminium. The shiny metal is more in demand today than it has ever been thanks to advances in manufacturing technology. The automotive industry is using more and more of it instead of steel in the body, forgings and castings, as aluminium is both both light and strong. Increased production of a resource that is readily available in India will not only lead to a reduced import bill but would also allow Indian automotive manufacturers to experiment with new production techniques and manufacturing technologies thanks to ready resource availability.
But even when it comes to steel, Governments in the past have allowed projects to get derailed due to acts of omission and commission. A few hundred kilometres from lanjigarh lies the port of Paradip, beside which a gigantic steel plant was supposed to come up made by a South Korean company, POSCO. This steel was supposed to be used on the millions of cars produced by the Indian automotive industry every year, one of the few Make In India success stories. Yet, a large percentage of steel used by the automotive industry is still imported. This is not because there is a shortage of steel and steel production in India but because the particular grades of steel required for automotive production are not made in enough quantity in India. The reason the plant could not come up was because some betel farmers encouraged by a local goon and promoted by Delhi-based activists, did not want the plant to come up. POSCO tried for a decade and then picked up sticks and left. You travel to these areas today and all one sees is poverty. Global anti-development activists want to keep people poor so that the latter fall victim to living off handouts. Keeping people in poverty is the raison d’etre for these activists.
There is no doubt that unrestrained natural resource exploitation is not a good thing. That can lead to dramatic environmental damage and living some people worse off. Yet, in China where these activists do not dare enter, the manufacturing push given by the Government there alongside using the country's more limited natural resources has meant that over 500 million people have been listed out of poverty. And that, no matter which way you look at it, is impressive. Because no matter how much some politicians might cry for social justice and reservations, the best way to achieve social justice is economic empowerment. That will come with economic and manufacturing development; the Make In India scheme has to be seen through this prism.
Thankfully, after the Modi Government came to power, the amount of natural resources India imports has seen a correction. Partially this is due to the fact that the Chinese growth slowdown has seen commodity prices crash, particularly with oil and gas, and the Indian economy got a massive booster dose thanks to it. Also, in line with Supreme Court guidelines, the Government repaired the corrupt system of resource allocation in the country perpetuated by the previous regime. It has also been working on improving the way India takes advantage of its natural resources. The Coalgate scam was a case in point where India’s ‘robber barons’ tried to lay claim to immense natural resources for free. It was business as usual in India, where the rich kept on getting richer. Although the 2G telecom scam is thought of differently, as spectrum does not have a physical manifestation, it was another case by which corrupt politicians tried to hand over resources for cheap to their friends.
Most importantly, alongside the need to make resource allocation fair and ensuring that businesses both state-owned and private pay the correct amount for the resources it is imperative to ensure that local populations are not left behind. The fact is that the reason several local populations protest developmental projects is because of decades of misguided rehabilitation projects. The betel farmers near Paradip were protesting the POSCO plant not just because they perceived they would lose their livelihood; it was because the rehabilitation projects by the nearby oil refinery three decades ago was badly planned. And on that front much remains to be done.
However, the basic point stands. India is a huge market and India can also address a large market globally; making in India is the obvious thing to do. But making in India requires supplies from upstream, and those have to come from India as well. This will create millions of jobs both upstream and downstream, opening up myriads of economic opportunities and economically empowering millions of people. And taking away the oxygen from glib activists sitting in western cities, crying about the plight of others over cocktail dinners.
(The writer is Managing Editor, The Pioneer)