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Our mines, their mines

The poverty and backwardness of three eastern states, despite their rich natural resources, is ironic, writes Prakash Patra.

india Updated: Jan 02, 2007 00:48 IST

Last week, the Chief Ministers of Orissa, Chhattisgarh and Jharkhand — Naveen Patnaik, Raman Singh and Madhu Kora — made two agreements. Both agreements will help these states to put up a combined front on the mineral and power sector policies of the Centre. The agreements will also help the chief ministers to assert their rights, as stakeholders, over the use of the huge wealth generated from the natural mineral resources in their states better.

The poverty and backwardness of these states, despite their rich natural resources, is ironic. Unequal resource distribution and the lack of development has led to the rise of Naxalism. Comprising mainly tribals, the three states have reaped little benefit from the exploitation of the natural resources of the region. Conversely, booming industrial activity has threatened to displace tribals from their homelands. The three states forlornly make up the bottom pile of most development indices.

Now, these chief ministers want an ‘equitable arrangement’, under which mining of natural resources of a particular state will mandatorily also contribute to the revenues of that state. That it doesn’t do so at present is a fair indicator
of the illogical precepts of current policy.

Their requirements, on the face of it, follow a logic. If a company is granted a mining lease, preference must be given to those organisations willing to invest in that particular state. This means that industries should ideally be located at the sources of mineral extraction. This will help create small townships; employment, education and health facilities would follow.

On the power front, it has been pointed out that the states that have coal deposits face issues of environment degradation and displacement of tribals. The people tapping coal blocks for power generation have no obligation towards the region from where coal is being extracted. This must be reversed, assert the CMs. Apart from seeking revision of coal royalty, they have opposed the Centre’s insistence on competitive bidding for procurement of power with long-term Power Purchase Agreements (PPAs). The CMs, instead, seek that the states be allowed to invite independent power producers to set up plants which will guarantee certain advantages for the state. The three states want separate legislation that will allow the state government to levy duty on the generation of power.

Some view this latest conundrum in Centre-state relations, where states are staking a form of exclusive claim to their region’s resources, as not very healthy. It is argued that the ‘backwardness’ of the tribal region in the country’s heartland is a result of the Centre not providing the resources to develop these areas. To a large extent, the skewed development perspectives and policies of the states themselves, coupled with apathetic and ineffective governance, are to blame.

It can also be surmised that the united bloc may be a purely political positioning, since the BJP is ruling in Chhattisgarh and shares power with Naveen Patnaik’s Biju Janata Dal in Orissa. Madhu Kora, the new Chief Minister of Jharkhand, may be a part of the UPA coalition at the Centre, but his fragile government is simply pursuing the policies of the erstwhile BJP regime.

It is then hardly a coincidence that the governments of BJP-ruled-Rajasthan and Janata Dal(S)-BJP-ruled Karnataka are backing the three states in their current demand. But it would be interesting to review these leaders’ track records from the period when the NDA was in power at the Centre.

But even if the present grouping of the mineral-rich states is dubbed as a political gimmick to whip up passions on regional lines, the logic and merit in the arguments put forward by these backward states cannot be denied.

The dynamics of Centre-state relations are generally viewed as operating against the interests of the states. No doubt, the Centre will look to find ways and arguments to nip the latest issues raised by the Orissa-Jharkhand-Chhattisgarh triad in the bud. To fully give in can open a Pandora’s box — with other states demanding additional special concessions for their resources exclusive to their states. But the central government cannot dismiss the issue either. In a coalition regime, the states that contribute the maximum seats to the ruling alliance at the Centre benefit the most. In the present UPA dispensation, Bihar, Tamil Nadu and Maharashtra call the shots. But no state should feel neglected just because it has no voice at the Centre, in terms of the strength of its representation.

A refusal to negotiate with the three CMs and their demands for a larger stake in the mineral resources would only fan the flames of perceived biases. The Centre may be accused of yielding only to the pressures of Lalu Yadav, M. Karunanidhi and Sharad Pawar, who can use their numbers in the Lok Sabha to keep pushing up the bar of their demands.

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First Published: Jan 02, 2007 00:48 IST