1. Procedural Paper
The Resource Curse of the Scheduled Areas: Politics in the
Case of the Bauxite Mineral Industry in Tribal Central India
Patrik Oskarsson, p.oskarsson@uea.ac.uk
Version Date: 23 May 2007
Supervisors:
John Cameron
Nitya Rao
Oliver Springate-Baginski
School of Development Studies,
University of East Anglia, Norwich, UK

2. Table of Contents
INTRODUCTION......................................................................................................................................4
RESEARCH CONTEXT ...............................................................................................................................5
CONCEPTUAL FRAMEWORK AND RESEARCH QUESTIONS ....................................................7
LAND AND NATURAL RESOURCES IN THE TRIBAL AREAS OF INDIA .........................................................8
Land Rights.........................................................................................................................................9
The Mineral Industry........................................................................................................................13
The State’s Eminent Domain ............................................................................................................16
THE POLITICAL ECONOMY OF INDUSTRIALISATION ...............................................................................17
Economic Reform in India................................................................................................................18
Governance over Minerals ...............................................................................................................20
Resource Abundance as a Curse for Poor Countries .......................................................................21
AIMS AND OBJECTIVES ..........................................................................................................................23
RESEARCH QUESTIONS...........................................................................................................................24
METHODOLOGY...................................................................................................................................25
EPISTEMOLOGICAL CONCERNS ..............................................................................................................27
DATA COLLECTION ................................................................................................................................28
Primary Data....................................................................................................................................28
Secondary Data ................................................................................................................................30
TIMELINE ...............................................................................................................................................34
ETHICS IN RESEARCH .............................................................................................................................35
REFERENCES.........................................................................................................................................35
APPENDIX 1 - STATE INCOME FROM ROYALTIES ....................................................................39
APPENDIX 2 - TIMELINE ....................................................................................................................41
List of Tables
TABLE 1: KEY FACTORS WHEN COMPARING THE STATES OF ANDHRA PRADESH AND ORISSA ....................26
TABLE 2: KEY INDICATORS TO DETERMINE THE COSTS AND BENEFITS OF MINING. .....................................31
TABLE 3: DETERMINING THE NATIONAL AND STATE EARNING FROM MINING ...........................................32
TABLE 4: MANDATORY CLEARANCES FOR MINING PROJECTS ....................................................................32
TABLE 5: MINERAL ROYALTIES FROM METALS AND OTHER IMPORTANT MINERALS FROM SELECTED
STATES (CONTINUED ON NEXT PAGE) ................................................................................................39
TABLE 6: TOTAL MINERAL ROYALTIES FROM SELECTED STATES ..............................................................40
2

3. List of Figures
FIGURE 1: MAP OF THE CENTRAL-EASTERN INDIAN STATES ANDHRA PRADESH AND ORISSA. ....................6
FIGURE 2: CONCEPTUAL FRAMEWORK .........................................................................................................7
FIGURE 3: COMPARISON OF ANDHRA PRADESH AND ORISSA SCHEDULED AREA LAND TRANSFER
LEGISLATION IN RELATION TO MINING. .............................................................................................12
FIGURE 4: SCHEMATIC VIEW OF PROPOSED BAUXITE MINE ON BAPTHIMALA MOUNTAIN, KASHIPUR,
ORISSA. .............................................................................................................................................15
FIGURE 5: INDUSTRIAL SITES OF OBSERVATION .........................................................................................29
FIGURE 6: THE IRON ORE MINES OF KEONJHAR DISTRICT, ORISSA, COVER VAST AREAS OF LAND. BLACK
SOOT FROM SPONGE IRON FACTORIES HAVE FURTHER DEGRADED THE LAND SEEN AT THE BOTTOM OF
THE PHOTO. .......................................................................................................................................34
* Front page photo: Manual loading of Bauxite ore from mine in Western Chhattisgarh.
3

4. Introduction
The hills of the Eastern Ghats of Central-Eastern India contain some of the country's
richest mineral1 deposits, particularly in iron, coal and bauxite but are also the home to a
majority of India's approximately 70 million tribal people2. Recent economic growth in
India as well as increased world metal prices have seen strongly increased interest in mining
the deposits that are located on land meant to serve as a source of empowerment
economically and socially for tribal peoples. Repeated failures to provide local benefits
from large-scale industrial 'development projects' mean every new project will face fierce
local opposition. Tribals to a large extent share a history with other rural communities of
government failure to rehabilitate those displaced which has become widespread enough
for an awareness to settle in among the project affected that unless they resist they will
become completely impoverished3. Those that remain in the vicinity of mines or industries
that are pushed through by governments and industry claim that lowered groundwater
levels, disappearing springs and environmental pollution are making agricultural sustenance
even more difficult than earlier (Indian Peoples' Tribunal 2006; PUDR 2005). The
generally low education levels in the mining districts additionally mean that only the lucky
few will manage to secure a job at a new plant whereas most will see outsiders move in and
claim the benefits. It should be quite clear that industrialisation as it is currently
implemented has little to offer rural communities.
Economic liberalisation in India since the early 1990s has modified the role of the local
state as central government funds are no longer available to the same extent to fund
projects. States now have to compete among each other for investment from private
enterprises, while still bearing the main responsibility for the welfare of its poorest citizens.
This dual role of the state is not necessarily new but the scale and speed with which
operations are expanding, as well as the increased opportunities a liberalised economy
offers the political and economic elites are. The determination of the state to promote
industry is most starkly seen in the state violence perpetrated against tribal opposition in
1 Minerals are here understood as non-fuel and non-atomic minerals. Since the geographic area is defined as
central India this further reduces commercially exploited minerals to metals and limestone.
2 India's indigenous peoples are usually referred to as tribals or adivasis (the original/first inhabitants).
3 There are many cases in Orissa of villages that have sealed themselves against outsiders and especially
government representatives as soon as an industrial project has been declared in their area. Current examples
in Orissa are the Utkal Alumina project in Koraput district, POSCO steel plant in Jagatsinghpur district and
Kalinga Nagar Industrial Area in Jajpur district.
4

5. the police firings in Kalinganagar in 2006 and in Maikanch in 2000, both in Orissa.4 At the
same time the mineral deposits that are available offer hope for socio-economic
improvement in a way that no other economic activity can at present.
This study takes as its starting point that outcomes of large-scale mining and industry and
its related environmental, social and economic implications will to a large extent depend on
the interest and capacity of the local state to manage the demands and needs of different
stakeholders. Will it intervene to make sure a greater share of the earnings from an
increasingly privately run mineral industry remains within the state and if so will it share
this with the mineral-producing areas to avoid future local protests? Will the short-term
profits when exporting minerals be favoured over for example environmental protection or
investments in processing industry that could lead to better long-term sustainability?
Following the drastically increased mining in the recent past and with the intention of the
Indian government to promote even further mining (see e.g. Government of India 2006b)
it is important to understand the priorities, concerns and capacities of the mining states5 to
carry out its multiple roles. The bauxite industry6 represents a relevant case study of the
contradiction between tribal rights to land and livelihood and large-scale industrial
development in Central-Eastern India. It is an industry under rapid expansion due to high
international demand, altering the earlier rationale for mining based on national selfreliance through public sector development to an economic model driven by private, and
usually international, investment for export growth.
Research Context
In order to examine the issue in more detail the study will be focussing on two states
encompassing the southern stretch of the Eastern Ghats mountain range, Andhra Pradesh
and Orissa (see map below).
4
Das, P. (Jan 3 2007) Tribals vow to oppose displacement. The Hindu: Chennai,
http://www.hindu.com/2007/01/03/stories/2007010307121400.htm
Biswas, R. (Jan 3 2006), Orissa firing fuels tribal ire on MoUs, The Telegraph: Calcutta
Sharma, K. (26 Dec 2004). Un-shining India. The Hindu: Chennai
5 India's main mineral producing states are central Indian Orissa, Jharkhand and Chhattisgarh together with
Andhra Pradesh for coal and metals.
6 The Bauxite industry includes Alumina refineries, usually located next to the mines, and Aluminium
smelters located in areas with low energy costs, in India close to coal mines.
5

6. Figure 1: Map of the Central-Eastern Indian States Andhra Pradesh and Orissa.7
Orissa is often identified as India's poorest state in terms of the proportion of people living
below the poverty line. As such the state is excluded from much of the rapid economic
development that is taking part elsewhere in India. But within Orissa disparities are as wide
as those between the state average and more 'prosperous' states like Tamil Nadu,
Karnataka or Maharashtra. Coastal areas including the capital Bhubaneshwar are relatively
affluent with an incidence of poverty around 35%, compared to the inland areas that have
very high levels at 68% living below the poverty level. The Scheduled Tribes and Scheduled
Castes in southern interior Orissa are the poorest groups of all with 92% and 82%
respectively below the poverty line (de Haan 2004). The adivasi people of inland Orissa
have not only experienced very little progress in terms of human development but also
been subject to a range of development projects in water, forest and mining which have
expropriated their lands further (Randeria 2003). The scenario for poverty alleviation is
difficult to say the least.
7 Specifically, the bauxite deposits are located in the North-East of Andhra Pradesh close to Vishakapatnam
and the border of Orissa. In Orissa bauxite is mainly found in the Southern parts of the state but deposits are
also found on the Western side of the state
6

7. Andhra Pradesh has been considerably more successful in reducing poverty, having
managed to halve poverty between 1993 and 1999 (NSS 2001). The state has received
much foreign direct investment (particularly IT investment) but this has primarily benefited
the urban middle class in the capital Hyderabad. Rural Andhra Pradesh has witnessed an
agrarian crisis even for landed farmers (evident in the much-publicised farmer suicides) and
tribal people, particularly across the northern forest belt of the state, continue to suffer
from marginalisation and chronic poverty. Whilst the Scheduled Areas in the north-eastern
part of the state have not seen large-scale mining since the Supreme Court Samatha
judgement (1997) governments of the state have made and are making repeated attempts
to overcome what is seen as an obstacle to the industry. The deficiency in human
development is on par with the areas across the border in Orissa and as long as
communities resist mining plans there is even less money or political incentive to provide
the needed hospitals and schools.
Conceptual Framework and Research Questions
This section outlines the key concepts that will be used for further analysis. Further a set of
overall Aims and Objectives are defined and these are refined into precise Research
Questions that will guide fieldwork and data analysis.
Figure 2: Conceptual Framework
Political Economy of
Industrialisation
Land Rights
Land Use
Customary
Rights
Economic Incentives
National and
‘Society’ Rights
Legal Verdicts and
Implementation
Social
Mobilisation
Maoists
Power
NGOs &
Social
Movements
Elite
Capture
Political
Incentives
‘Resource Curse’ of the Scheduled Areas:
• Continued poverty
• Increased inequality (to the rest of the
state)
• Environmental concerns
• Potentially increased militant activities
7

8. The proposition of this research is that the issue of land and who has access to land and its
resources in the tribal areas, and the greater political economy of industrialisation have
interacted to create a sub-national ‘resource curse’ situation for the tribal people who live
in the Scheduled Areas of Andhra Pradesh and Orissa (see Figure 2 above). The land
which was meant to be home territory to the peoples classified as tribal have for complex
reasons mainly come to be vested under the control of the state. When state rights and
tribal private rights to land have clashed the courts have been the option for negotiating
the different claims. Uneven power relations and the greater economic incentives promised
by the mineral industry has generally triumphed other concerns. But outcomes are still far
from certain as local groups and individuals mobilise to keep their land or at least receive
just compensation for it. Social movements and political parties vie for the support of local
people while at the same time aiming to please the powerful industrialists and other elites
with interests in promoting industry. The ‘curse’ of mineral resources seems to indicate the
continued poverty and lack of influence of tribals amidst resource wealth but constitutional
rights and increased mobilisation might open up for more inclusive outcomes.
Land and Natural Resources in the Tribal Areas of India
India's tribal people, the adivasis, is a social category not easily captured or defined. It
comprises a wide range of peoples living across a number of different states, where some
have their own religion, language or other customs separating them from 'mainstream'
India but others do not or have converted to use religion, language or customs similar to
other social groups. As tribals are today more diverse than ever the use of the term has also
become more contested (Xaxa 1999). The official ‘definition’ of the Government of India
still uses a colonial language which assumes special importance as it is the state that is
supposed to provide the main social support systems for tribal people:
“The criterion followed for specification of a community, as scheduled tribes are
indications of primitive traits, distinctive culture, geographical isolation, shyness of
contact with the community at large, and backwardness.”8
Following the official negative definition of a tribal it would seem a natural response for a
tribal would be to want to overcome her or his primitiveness, shyness and backwardness.
8
Website of Ministry of Tribal Affairs, Government of India, Delhi, Accessed 2006-11-22,
http://tribal.nic.in/schedule1.html
8

9. This would mean to become non-tribal, and assimilate with the rest of society. Roy
Burman (2003) offers a more positive way of describing tribal people:
"In the normative sense, a definition of adivasis can still be used to cover people
who feel rooted in their surroundings, entertain a custodial sense about their
territory and resources, are bound together primarily through moral bindings and
entertain a sense of reciprocity and mutuality reinforced by egalitarian ethos."
The Scheduled Areas of India are those listed in the fifth schedule of the constitution as
having a majority of tribal people at the time of India's independence. Since then these
areas have faced large-scale migration of non-tribal populations resulting in tribals in some
areas no longer being the majority community. At the same time tribal villages 'left out' of
the original Scheduled Areas have not been included indicating the status quo that has
lasted over the past 60 years on paper (Sarma 2006). In reality major migration flows has
taken place both in and out of the Scheduled Areas leading to often radically changed
composition of peoples.
The support extended to tribals has tended to vary between paternalism in the sense that
tribal people should be guided into the light of development and modernisation versus a
more idealised image of tribals as environmentally benign beings (Corbridge et. al. 2005).
Most rights of tribal people depend on them actually residing in the Scheduled Areas. This
includes special land rights, reservation for tribal political leaders in elections, and the
possibility to amend any law to suit tribal area conditions. This has caused Baviskar (2003)
to claim that tribals are being "incarcerated in nature" by the policies that were meant to
support them. The multitude of groups that comprise tribals in India together with the
difficulty for them to claim to be more indigenous than other people in at least South India
pose major problems when tribal people as a group are trying to ensure rights to land and
livelihood. But the definition has existed since the British and has as such become well
established.
Land Rights
Land is a source of income and security for a vast majority of tribal people commonly
depending on rain-fed agriculture and collection of minor forest products. In the
Scheduled Areas most land has been claimed by the government however, either as forest
or as revenue land. This stems from the claim of the government to all land identified as
9

10. forest, as unused so called wasteland, and as hill slopes too steep for agriculture when land
records were established. Tribal land title deeds make up much of the remaining private
land although non-tribal encroachments have been many over the years (Kumar &
Choudhary 2005).
Continued intrusions by outsiders and the loss of land by tribal people through money
lending, unsettled land records and displacement from industrial and agricultural projects
has been a source of contention in the tribal areas for centuries. Starting with the British
colonial government and further strengthened by subsequent Indian governments a
response has been to introduce special rights to land for the tribal people as the historical
inhabitants and cultivators. Whether these special rights were given to the tribal areas by
benign rulers recognising the many ways outsiders continued to alienate tribals from land,
or a result of tribals asserting their rights to traditional lands remains disputed. Parts of the
Bastar area in South Chhattisgarh for example remain unsurveyed by the authorities until
today since the area has been considered high in biodiversity as well as in tribals showing
very 'primitive traits'. Both these qualities needed to be conserved for the future (Sundar
1998). An entirely different motivation for the creation of special tribal land rights is
presented in Arnold (1982) who writes of the "rebellious hillmen" of 19th century Madras
Presidency, today Vishakapatnam and East and West Godavari districts of Andhra
Pradesh. Though limited in scale, the recurring uprisings against the British administration
and local landlords enabled special concessions to be established. The history of violent
uprisings in the hills continued when the Maoist rebel group usually referred to as the
Naxalites moved to the hills of the Eastern Ghats in the 1950s. Yet another protest
movement, this time in Srikakulam district in the 1960s, finally resulted in the very
restrictive current legislation in the Andhra Pradesh Land Transfer Regulation Act (1970)
(APLTR Act) (Laxman Rao et. al. 2006) (See Figure 3 below for more details on the
APLTR Act). Pati (2001) describes several similarly violent rebellions during the 19th
century by the Kandha tribe of Kalahandi district of South Orissa. Again the tribals
revolted against a combination of the colonial administration and local landlords who
cooperated to push the tribe away from its traditional land.
According to the APTLR Act in Andhra Pradesh no land in the Scheduled Areas can be
transferred to a non-tribal whether owned by a tribal or by the government. Land can not
be sold to a non-tribal even if the tribal is in need of selling the land and the main (legal)
10

11. ways of transfer will thus be through inheritance or between tribals. The regulation is strict
enough to state that any non-tribal having land in the Scheduled Areas can be assumed to
have taken this land from a tribal and is thus illegally occupying it. With an administration
with a vested interest in not settling illegally occupied land and tribal people unable to
move courts and authorities to follow the law only very limited areas of alienated land has
been restored. The corresponding legislation in Orissa, the Orissa Scheduled Tribes
(Transfer of Immovable Property) of 1956 (OSATIP), is only relevant to privately held
tribal land and not to government land but has the same stringent clause banning transfer
from tribal to non-tribal (Kumar and Choudhary 2005) for a comparison of state land
transfer legislation). A major problem with land regulation has been the multiple interests
of the state as the main upholder of rights for tribals while at the same time being the
biggest landowner and a representative of a class of land owners with vested interests in
not settling title deeds.
Upholding land rights for tribal people may not necessarily be enough to secure poverty
alleviation. Despite the problems of displacement and non-settlement of title deeds tribal
landholding is often larger than those of farmers on the plains and yet they remain poorer.
The low productivity of the land, relying only on rain for irrigation water and without
inputs such as fertilisers, has prevented them from secure income generation. In this light
mineral and forest products do offer some of the few alternative opportunities for
economic improvement.
11

12. Figure 3: Comparison of Andhra Pradesh and Orissa Scheduled Area Land Transfer
Legislation in relation to mining.
Andhra Pradesh
•
No land, tribal private land as well as government land, can be acquired
or leased to a non-tribal for mining or industry
•
The government can setup a mine and sell the mineral to any company
since it operates in the public interest
Orissa
•
No tribal land can be sold or leased to a non-tribal
o the government is free to do whatever it wants with government
land (about 85% of all land in the Scheduled Areas)
o And it can acquire tribal land in the greater interest of society and
sell this land to any company (putting the actual value of the land
rights legislation into question since there is no need to demonstrate
public purpose to acquire the land)
•
It is against the law to make a tribal landless (meaning other land must
be provided if state acquires it)
In 1997 the Supreme Court delivered a landmark verdict, the so-called 'Samatha
Judgement'9, upholding the right to land for tribals in the Scheduled Areas of Andhra
Pradesh against state and private company interests in mining and industry. The judgement
stated that not even the state had the right to acquire or lease land to private companies
resting on the state land transfer legislation read together with the constitutional protection
for tribals10. After this judgement all private mines were forced to close down in Andhra
Pradesh and it seemed that this would happen across India's Scheduled Areas since the
court had recommended that all states with similar legislation should settle the issue in an
analogous manner. Government efforts (central as well as those of the state of Andhra
Pradesh) were to side-step the judgement by trying to amend the constitution11 as well as
the land transfer regulations of the state. Eventually the Supreme Court itself came to the
9
Supreme Court case of Samatha vs State of Andhra Pradesh, 11.07.1997
The case was taken to the Supreme Court as Public Interest Litigation filed by the Andhra Pradesh NGO
Samatha on behalf of tribal villagers in Vishakapatnam district.
11 The note was widely published in the Indian press. See for example Manoj Mitta, "When the law
displaces", Indian Express, September 21, 2000
10
12

13. rescue of concerned industrial promoters through the 2001 Balco case12. This judgement
restricted the ‘Samatha Judgement’ to only apply to Andhra Pradesh opening up for
privatisation of Balco aluminium in the Scheduled Areas of Chhattisgarh and further
private investment in India's other tribal states.
The government of Orissa's special sub-committee created to overlook the interpretation
of the Samatha Judgement in the state, headed by the Chief Minister Naveen Patnaik,
decided in the same year as the Balco case that the Samatha Judgment did not apply in
Orissa. The decision was based on the claim that there were already extensive provisions in
the state’s existing laws to protect tribal interests.13 A few years later the Orissa government
moved ahead to invite international mining companies to the state, implying a further
opening of its Scheduled Areas. Even in Andhra Pradesh the judgement remains contested
apparent in a recent Memorandum of Understanding between the government of Andhra
Pradesh and a private company to cooperate in mining and refinery operations in the state
(Government of Andhra Pradesh 2005).14 The cooperative tribal mining companies
envisioned by the Samatha Judgement remain side-lined to minor efforts in gem quarries.
The Mineral Industry
A large number of studies point to the apparent contradiction between adivasi
development and extractive industries-based economic development (for example
Downing 2002, Fernandes 1992, Warden-Fernandez 2001). This contradiction has become
more obvious over the last decades worldwide since much of the remaining unexploited
ores lie under indigenous lands (Ballard and Banks 2003). Only a very small part of the
wealth generated from mineral extraction appears to be distributed to tribal people (i.e. via
state infrastructure development and welfare programmes), yet they face multiple
associated risks of impoverishment from the loss of their traditional lands, cultural
integrity, sources of income, and food security, health risks, and loss of human rights
(Downing et al. 2002). Local experiences of mining and resistance to new projects are best
exemplified via the reports of public enquiries such as the Indian Peoples’ Tribunal (2006)
12
Supreme Court judgement on Balco Employees Union vs. Union of India and others, 10/12 2001
The rules cited in this regard were the Orissa Scheduled Areas Transfer of Immovable Property (Scheduled
Tribes) Regulation (OSATIPR), 1956, and the Orissa Zilla Parishad (Amendment) Act, 1997 (Down to
Earth, Breach of law, 15 Aug. 2003).
14 According to the memorandum the government will hold the mining lease to circumvent the Samatha
Judgement ban on transfer of land in the Scheduled Areas while the private Jindal corporation will perform
all other functions from planning operations, applying for environmental clearances to leasing the necessary
equipment to the government mining company.
13
13

14. and PUDR (2005). These civil society organisations are some of the very few detailed field
studies on mining and industrial projects in tribal India at the moment.
India has 8% of the bauxite deposits in the world, out of which 75% are in Orissa. The
major bauxite deposits are located in the Scheduled Areas in Kalahandi, Rayagada and
Koraput districts with large scale mining being done by NALCO in Koraput district, South
Orissa. The economic growth in India in recent decades is only part of the explanation for
the increased interest in mining15. Internationally, high prices16 and especially a soaring
Chinese demand for metals like bauxite, iron and chromium determine mineral extraction
and to some extent processing for exports, while coal is mined for local energy needs.
Inefficient public companies, especially in the coal sector, and a lack of capital and
technology are all speaking in favour of increased private mining in the future.
Modern mining has largely abandoned its traditional underground operations through deep
shafts in favour of open pit mining. Open pits result in significantly larger amounts of
overburden having to be removed to reach the ore body and also prevents agro-based
activities from taking place at the surface level while minerals are extracted underground.
Bauxite miners do not have the choice to operate underground like coal or iron ore miners
in some cases have. Bauxite deposits in Andhra Pradesh and Orissa are shallow sediments
on top of particular mountains (see Figure 4 below). The mineral is porous enough to
allow it to be scooped up with no or little blasting by enormous diggers. Under such
conditions a mining company can best hope to ameliorate its environmental impact by
doing proper post-mine rehabilitation of lost topsoil and forest (there are other related
problems such as how to contain the toxic mine waste and control groundwater depletion
which will affect both underground and open pit mines).
15
The extractive industry in India is concerned with a wide range of minerals and metals but largely not oil or
gas. Thus mining in this paper is confined to non-fuel minerals if not specifically stated otherwise.
16 For example prices of iron ore increased 70% during 2005 (US Geological Survey 2006)
14

15. Figure 4: Schematic view of Proposed Bauxite Mine on Bapthimala Mountain, Kashipur,
Orissa.17
= Village located along the mountainside
= Land claimed by tribal people as
traditionally used
Layer of Bauxite on top of the
mountain (thickness 15-20
metres)
Bauxite from central India is almost exclusively refined into alumina, an aluminium oxide,
and this often takes place just next to the mine. Further processing into aluminium uses
vast amounts of energy which is why smelters have traditionally been located in countries
with low energy costs such as Canada, Norway or the Middle East. India and China is
changing the world production of aluminium into one powered mainly by coal but also by
hydropower. The main bauxite producers are all found in the tropics in countries like
Australia, Guinea and Jamaica. The weather conditions in these countries as well as in
Eastern India are the key to the formation of bauxite as heavy rains will leach out the iron
content of soils and lead to the 40% and above alumina content that is seen as
commercially viable bauxite ore.
Andhra Pradesh has drastically increased its collection of royalty in recent years to become
one of the main royalty earners among all states. Coal royalty is fixed to Rs. 7 per ton but
still amount to at least 75% of total royalty in the states of central India. Royalty continues
to remain a very minor part of the budget in Andhra Pradesh at 864 crore (approximately
£108 million) for 2004-2005 compared to Orissa's 663 crore (£83 million). The states are
likely to continue their demands for increased royalty rates by the central government as
well as other measures to increase revenue together with requirements that companies
must develop industrial facilities within state borders or lose mine licenses (detailed royalty
data is available in Appendix 1 on page 39).
17
Based on interview with researcher, Orissa, 2006-10-26
15

16. The State’s Eminent Domain
Remaining untouched natural resources like rivers, forests and minerals are in India mainly
located in the scheduled areas. In 'public interest' the state can invoke the Land Acquisition
Act, 1894 and acquire land for any kind of project to extract or utilise these resources, on
its own or via an agent such as a private company, by claiming the eminent domain of the
state. The state's eminent domain is a right to undertake a development project for the
benefit of society which conflicts with individual rights to property as well as with group
rights to common property resources. The use of eminent domain in India without
implementing proper checks and balances has come under a lot of criticism. "Indians, like
the British, have continued to use double standards with occupancy rights, and for similar
ends - the exploitation of resources from the common land" (Singh 1986:21).
As invoking the eminent domain builds on the public purpose of a particular project it
could have been envisioned that a detailed set of regulations would be available to define
what this is. Indian courts have never really gone into the basic question of what is meant
by public interest however. Courts have dealt greatly with interpreting what is the purpose
of a particular project but never defined who the public is that will benefit from it. If larger
questions of purpose have been raised courts have generally sustained the view that a
government's perception of what constitutes public purpose is above judicial review since
the government after all has been democratically elected to represent the people (Pimple
and Sethi 2005).
By using the right to acquire tribal land for public purpose the Orissa government has been
able to take land from its poorest tribal citizens and pass it on to private interests in the
mining industry. The strength of the eminent domain has enabled the state government to
keep protective land transfer legislation on paper which is good for political campaigns, but
left them with the option to bypass the same legislation to promote industrialisation when
felt appropriate. It is clear from this that the outcomes of actual implementation of rights
and laws as well as deciding what lies in the public interest will depend on the influence
and power of different interest groups.
16

17. The Political Economy of Industrialisation
One of the central poverty alleviation strategies adopted in independent India was statedirected industrialisation, although the vision of the large-scale industry of Nehru differed
significantly from Gandhi's ideal of cottage industries (Kohli 2004; Evans 1996). India has
recorded some successes in its industrialisation efforts since independence e.g. through the
establishment of centres of excellence in education and a basic industrial base. In an
international comparative perspective the results were clearly inadequate since the inwardlooking, import substitution policies adopted resulted in a so called 'licence raj' where
opportunities for the bureaucracy as well as the industrialist classes lay in protectionism
and control rather than competitiveness and continuous improvement. Specifically, Kohli
(2001) refers to the fragmented nature of Indian politics aiming to satisfy too many
constituencies, and the weakness of its institutions as reasons for India's middling industrial
performance. Recent Indian economic growth may be seen as an indicator of the probusiness alignment of India's rulers since the 1980s. Industry, manufacturing as well as
mining, have not benefited to the same extent as the service sector that has been the main
force behind Indian economic growth (Kohli 2006).18
The Indian state as a representative of certain class interests is a well-covered area. Bardhan
(1984) gives explanations for India's poor economic performance in the abuse of power by
the 'dominant proprietary classes'. Rich farmers, public-sector professionals and industrial
capitalists were all vying for power and largely able to corner the main benefits of the states
between themselves. At the same time no one group was strong enough to dictate events
resulting in a status quo when one of the dominant classes was able to block the efforts of
another. Bardhan concluded that change was structurally inhibited and change almost
impossible. A slightly different version on the Indian state was given by Rudolph and
Rudolph (1987). Their concept of a Weak-Strong State outlines a state that has ever since
its foundation alternated between "autonomous and reflexive relations with the society in
which it is embedded (1)". By this the authors referred to the ability of the state to make its
presence known across the country and wield considerable autonomy in economic policy
matters but also at times become over-stretched and fall prey to various special interest
groups. Both these and other authors focused on large-scale national models of a country
18
Kohli (2001) points to a business-government alliance with a narrow focus on industrialisation and nationbuilding as the main reason behind the economic growth of South Korea but he is also aware of the often
undemocratic ways in which this government operated.
17

18. with significant variation within. As discussed in the following chapter they also tended to
emphasise the rigidity of the system rather than the possibilities for change thus largely
failing to anticipate the significant reforms that took place in India in the 1990s.
Important for the understanding of the role of the state is however the widespread lack of
state representation in areas away from the main cities. Where the state has no presence
social institutions has taken its place to regulate India’s ‘informal market’, the market in
which an overwhelming majority of the citizens, especially tribal peoples, still live (HarrissWhite’s 2005). This informal regulation has tended to build on inherited structures of class
and caste of a very different nature than the formal legal setup. Even when the allocated
funds for plans made by the English-speaking elite in Delhi did reach its designated target
areas local, 'vernacular' understandings of the implementing agencies was often too
different to make sense of the plans resulting in serious mismatches between plans and
results (Harriss 2006).
In the Scheduled Areas the state has come to make its presence felt as an outside intruder
ready to take control over resources like the forest which has been managed locally for
generations, or as an usurper of land needed for industrial projects or dams. Rarely has it
succeeded in providing the educational and health facilities it is mandated to and even
institutions like minimum support price shops have when established often failed to
function according to plan.19 The importance of tribal votes does however ensure that
considerable funds continue to be devolved from state budgets reinforcing the dual roles
of the state in the Scheduled Areas.
Economic Reform in India
The 'economic reform' process, which has deregulated the Indian economy since 1991, has
coincided with international record prices for many minerals, mainly due to high Chinese
demand, to create an unsurpassed interest in mining and the mineral industry. New income
opportunities have private companies, domestic and international, as well as public sector
units competing for a share in what used to be an essentially state-controlled sector.20
19
It was still found on travels in Andhra Pradesh that tribal farmers could grow cash crops such as tobacco
and cotton and then rely on the minimum support price shops to buy the food items they needed.
20 There were notable exceptions to the state's control such as the Tata steel plants in Jamshedpur and Bhilai,
both established before Indian independence.
18

19. Reform should be understood not only as the relatively slow process of policy change by
the central government, inhibited by weak coalition governments, but as the sum of
changes to central legislation and the additional policy moves by increasingly powerful
states. Taken together significant changes have been made to the policy environment.
Characterising the way reforms were operationalized Jenkins (1999) concludes that the
economic reforms program has largely been reform by stealth since it would have gone
against the wishes of the general electorate.21
“The intellectual arguments of liberalisation would never have gone down with the
electorate and thus this debate was avoided. The sustainability of Indian economic
reform can therefore largely be explained by the government's ability to pursue
'reform by stealth' though this would not have possible in the absence of a
conducive constellation of incentives, institutions and skills. (Jenkins 1999:47-48)”
The stealth behaviour resulted in opposition parties voicing major disagreement with policy
changes only to continue with the same once in power (Suri 2005). Andhra Pradesh was
for a number of years a contradiction to the general pattern since its Chief Minister
Chanrababu Naidu openly declared his support for reforms thus becoming a poster boy of
international business magazines (Rudolph and Rudolph 2001). The most recent election
results with a loss for Naidu may indicate a return to the political norm of populism and
concealed intentions.
The economic reforms has been a source for new forms of patronage to substitute for lost
ones due to state's reduced regulatory role. The new economic and political incentives are
important for the continuation of reforms despite protests from many different sections.
"Indian politics […] induces socio-economic elites to engage in negotiation and
compromise - and governing elites to engage in obfuscatory and manipulative
tactics. These tactics include, in addition to outright pilfering: shifting unpleasant
responsibilities and blame on to political opponents, surreptitiously compensating
selected interests, concealing intentions, reassuring and then abusing the trust of
long-time political allies, and obscuring policy change by emphasising essential
continuity (Jenkins 1999:7)."
21 India is by no means unique in stealth reform as Jenkins also points out. The same has been witnessed in
e.g. the UK and the United States in the 1980s.
19

20. The rise of the 'competition states' is the increased independence of state governments to
make own policy decisions but also the fiscal pressure that forces them to compete for
private investment to substitute for lost central transfers (Corbridge and Harriss 2000). The
intense competition between states with very different ruling parties has lead to policies
becoming more similar through state learning in the adoption of successful policies (Sinha
2005). Even though reforms have generally gone in a pro-business direction it has meant
dismantling many virtual monopolies held by powerful business groups and to open up for
competition domestically as well as internationally. Part of the process of de-centralization
has been the gain of local state business groups on behalf of the old national business
houses (Rudolph and Rudolph 2001; Harriss 2006).
The literature on economic reforms in India opens up for explanations to new economic
and political opportunities. For the Scheduled Areas reforms has meant that land is being
acquired for various projects at faster rates and with less control than earlier. It means that
it has become accepted policy to acquire land for 'public purpose' and hand this over to
private investors.22 The importance of the approach taken by Jenkins (1999 & 2004) is also
in showing the functioning of actual democracies as opposed to the 'good governance'
agenda supported by e.g. the World Bank which advocates transparency and democratic
participation where there in many cases can be shown there is very little of either (See
Methodology Chapter for more on this point).
Governance over Minerals
The control over taxation and clearances of minerals are shared within the federal structure
of India between the central government and the states. Royalties for major minerals such
as bauxite, iron and coal are set by the central government whereas minor minerals are the
responsibility of the states. Political battles have been fought for decades over how the
share from mining incomes should be distributed. Since all royalties go to the states they
have had a keen interest in raising these especially in view of the rapidly increasing
international mineral prices in recent years. But the centre has had an interest in keeping
these low to be able to reap higher profits from public sector companies such as Nalco in
the aluminium industry and SAIL in steel. The result has been royalties ranging from only a
few rupees per ton in the case of coal to 64 per ton for bauxite compared to a market price
22 Public purpose could be to acquire land for private companies if it could be shown that the public would
still gain from the project through e.g. increased tax revenues. In the Scheduled Areas the picture is
complicated by the stringent land transfer laws that are in place.
20

21. of approximately 2000 rupees per ton of bauxite. Many states introduced additional fees to
add to the royalty until the Supreme Court prohibited these. Recently a move away from
fixed price royalties towards international market prices has been made (Government of
India 2006a).23
Another response from the states has been to try to promote downstream industry to set
up in the states since this would lead to significantly higher revenues than only having the
mines. Orissa has a policy not to approve mining leases unless significant investments had
been made in refineries and attempts were also made to introduce inter-state excise to
prevent transport of ore out of the state. State income from minerals has risen sharply in
recent years but information on the amounts that go back to the actual mining districts is
scarce. Even more difficult to assess is how much money the central government makes
from the industry since revenue is not declared separately. The central government remains
an important stakeholder through its control over the many clearances that are required,
especially environmental clearance. Within the central government mine clearances operate
under a complicated dual responsibility between the Ministry of Environment and Forests
(MoEF) for the environmental aspect but frequently more on socio-economic aspects, and
the Indian Bureau of Mines under the Ministry of Mines.
Resource Abundance as a Curse for Poor Countries
From a story in the 1950s to the 1980s describing natural resources as good for the
economic development of poor economies, a completely opposite literature has become
dominant since the 1990s claiming resource abundance is in fact a curse. The earlier claim
was based on how a lack of technical know-how and infrastructure meant that natural
resources could be a way for poor countries to earn significant income from export to
richer countries (Rosser 2006). Empirical studies of resource-dependent states and their
performance have shown clearly that most, but importantly not all, economies have underperformed compared to less resource-endowed countries. The 'resource curse' has thus
lead to a poor developmental record in terms of political unrest, economic performance
and ultimately in human welfare (Bulte et. al. 2005). Nevertheless there are authors who
speak of the "myth of the resource curse" as a theory (Wright & Czelusta 2004).
23
The most important minerals coal, iron and limestone remain under fixed royalty.
21

22. Certain types of resources have been found to be more prone to curses. Auty (2001)
distinguishes between "point" resources and "diffuse" resources where the former includes
minerals that are usually mined from specific locations and the latter agricultural and forest
products. The point resources, among which bauxite would be classified, requires more
capital-intensive modes of production and thus tends to have more concentrated
ownership and in the end also a smaller number of beneficiaries than the diffuse resources.
Countries depending on point resources suffer from more severe curses according to Auty.
A general definition of the resource curse is provided by Ross (2004:28) as "the
distributional conflicts that commonly arise when resource wealth is unevenly distributed
around the country". Ross further mentions four problems that governments, firms and
local communities must face when dividing the costs and benefits of a mineral
development project:
“Mineral-producing countries have the highest risk of violent conflict when they
have low income levels; when they produce oil or other deep-shaft minerals; and
when the mineral-rich region is mountainous, lies on the country’s periphery; and
harbours people who are ethnically or linguistically distinct from the rest of the
country’s population (2)”
The Scheduled Areas has been the home since decades for Maoist rebels. The remoteness
of the mountains has allowed them to find refuge and also to some extent support from
the local population. The continued exploitation of the area's resources including its land
by outsiders including especially governments themselves has lead to preciously little local
gains. The distinctiveness of the tribal culture from that of the representatives of the Indian
government has not helped to increase the understanding when implementing programs
and laws.
The literature on the 'resource curse' has come to depend on three separate sub-literatures
on the relationship between natural resource abundance and; economic performance;
political regimes; and civil war. Studies on economic performance have generally focused
on macro-economic effects that are not relevant to a study of sub-national territories such
as particular states in India. The writing on civil strife and warfare has mainly originated
from conflicts in Africa and the Middle East around especially oil and precious stones.
Despite the prevalence of Maoist groups in especially Andhra Pradesh these have largely
stayed away from both local issues of tribal rights and those of resource use to focus on
22

23. the 'larger' concerns of building a movement towards class-based revolution. Even when
an obvious and very easy to hit 'capitalist' target have cut straight through the heartland of
Maoist territory, such as the newly constructed pipeline which transports iron ore from
south Chhattisgarh over the Eastern Ghats and to the port in Vishakapatnam, Andhra
Pradesh, it has been left alone.24 This study aims to build on the theories of resources and
their impact on political regimes, especially the accountability of regimes with major
mineral resources within its territory that can be monopolised and extracted without the
active involvement of local residents.
There is now a large literature claiming the deterministic negative impact of certain
resources. Herbst describes this literatures claims as:
"The economic and political forces generated by fluctuations in export volume and
revenue in natural resource-dependent states are so powerful that they overwhelm
any type of political design. The resource decides the rule rather than the opposite"
(2001:1).
Suggestions have been made that the causation should be turned the other way around to
examine how certain political, economic and social factors impact on the possibilities to
benefit from a resource (Ross 2004; Rosser 2006; Lahiri-Dutt 2006). Clearly the exploiting
the same resource has lead to varying results across different countries indicating the
importance of studying the specific economic and political context. A study of the local
political economy of a sub-national economy dependent on a few minerals and its effects
on government accountability as proposed here could possibly contribute to this body of
research.
Aims and Objectives
How can the continued failures of state governments of eastern India to secure tribal rights
to land and resources be understood in relation to the conflicts between these rights and
the interests of the state in securing economic and political benefits through the promotion
of the bauxite mineral industry?
24 It would be easy to think that the Maoists derive some benefits from not attacking the pipeline, either
politically or economically but there is no proof of this at present.
23

24. Research Questions
1. What have been the changes to tribal rights to land and livelihood in the Scheduled
Areas of eastern India in relation to economic reforms and industrialisation since
the 1990s?
a. What were the forces and mechanisms limiting the bauxite mineral industry
in the Scheduled Areas before the start of economic reforms?
b. What internal and external forces have changed the earlier conditions since
the start of the economic reform process and opened up for increased
mining and industry in the Scheduled Areas?
c. Were the earlier lower levels of mineral industry operations a matter of an
actual higher level of protection for local communities or is increased
mining a sign of changing opportunities for governments and industry?
2. What are the characteristics of the local political economy of the bauxite mineral
industry in relation to the benefits and the distribution of these benefits driving
demand for an industry expansion and the mitigation and distribution of associated
costs?
a. What is the state income from bauxite mining and related industry and
who, within and outside the state, are the main beneficiaries? What is the
distribution of income between the states and the central government and
what are the funds going back to the districts where the mining takes place?
b. Who are made to bear the costs of mineral development and how are these
costs rationalised as being less than the benefits?
c. What have been the legal and political responses to the contradiction
between mineral-based industry and tribal rights to land with respect to
India's constitutional division of responsibilities? What have been the
responses to new opportunities in the mineral industry from political and
economic elites?
3. How can a theory of a sub-national resource curse guided by elite interests help
understand the prospects of economic and political empowerment of the mineralrich regions of central India?
a. How can a better understanding of the political and economic reasons
behind the conflicting interests between tribal people and the mining
industry improve theories on what appears to be a resource curse in a subnational context?
24

25. b. How can this improved understanding inform approaches that will enable
tribal communities to escape their poverty in resource-rich areas and the
domination by outside, non-tribal interests?
Methodology
India has been characterised as a ‘controlled laboratory’ when studying the local state
(Kohli 2001; Jenkins 2004). Jenkins (2004:3) describes why comparative intra-national case
studies are relevant when examining how actual democratic states function:
“India's federal system has created 29 'mini-democracies with almost identical
institutional infrastructures, at least in terms of the formal systems of
representation. India's States, moreover, operate under a set of common
conditions, including New Delhi's foreign and economic policy framework and the
legal protections enshrined in the Indian Constitution."
For the purpose of research into the mineral industry the major mineral rules and the
mineral royalty are uniform as declared by the national government. To promote industrial
development the states are increasingly active in generating special incentive programs to
differentiate themselves from other ‘competitor’ states. At the same time the states are
rapidly learning from one another making policies less diverse than could be expected
across India (Sinha 2005). The states Andhra Pradesh and Orissa have similar institutional
setup and similar but still crucially different land rights. Crucially the states have different
languages and political and economic histories. States are also to some extent constructed
borders where particular tribes have found themselves living across state borders with very
different majority communities. See Table 1 below for some key similarities and differences
between Andhra Pradesh and Orissa.
25

26. Table 1: Key factors when comparing the states of Andhra Pradesh and Orissa
Topic
Similarities/Common Elements
Resource
Differences (state specific)
One mineral refined according
to one process
Geology, Limited Geographical
Area
Industry
Few large companies dominate
on limited number of sites
Policy
National Mining policy, national
royalties since major mineral
Industrial policy, investment
policy
Legal
Constitution and Scheduled
Areas
Land Rights (very similar on
paper but not in practice)
Politics
Different Regimes relying on
different constituencies
Tribes and other communities
local (but spread across state
borders) and in the states
Researching power and politics in India's economic development requires discursive
approaches to uncover the often significant differences between the written policy and the
actual implementation. This is not the result of a mere gap between intentions and ability
to implement policies but based on a clash between different economic and political
interests. Jenkins (1999) was the first to attempt to uncover some of the hidden reasons
behind India’s economic policy reforms in the 1990s beyond the official need for change
due to a foreign exchange crisis. The results indicate reforms as an opportunity for new
economic gains and new ways to secure political power for those of India's politicians who
could navigate the difficult terrain. Policy debates and interview responses will be analysed
in a ‘narrative policy analysis’ (Roe 1994; Hajer & Wagenaar 2003) sensitive to the
importance of class and power as outlined by Harriss (2006).
In recent years there has been a wealth of books on the developmental state as it is
experienced by the poor (Corbridge et. al. 2005; Rudolph & Jacobsen 2006; Fuller and
Harriss 2000). These volumes focus on the multiple meanings of the state with its many
formal and informal interests manifested through different political parties, departments
within the bureaucracy, its urban/rural divide, and a legal system that is formally
independent but frequently has shown a class bias in favour of the upper classes in its
judgements. Historically sensitive institutional analyses on the role and responsibility of the
Indian state in promoting industrialisation have been made by Kohli (2001) and Evans
(1995). The research will attempt to contextualise current mining industry expansion with a
historical account of this industry’s background and growth and contrast this with a
26

27. different type of history related to that of tribal rights to land and livelihood in the same
geographical area.
Epistemological Concerns
The nature of industrialisation in tribal areas in terms of its effect on the health and
livelihoods of the people who live there as well as the environmental outcomes remains
blurred among stakeholders. Available information is not disseminated and what exists will
not be trusted by local people or by authorities and industry.
Although some aspects of mining’s detrimental effects on the environment are relatively
obvious, such as the destruction of forest cover at actual mine sites and the need to place
overburden and other waste in secure ponds, much of the worst impact remains hidden as
long-term leakage of acidity or heavy metals or a drop in groundwater levels.
The present is too contested for us to know whether there will be a shared view among
stakeholders of future use of land and resources in the research area. Other authors have
commented on persistent differences in worldviews:
"Competing land uses and conflicting resource management systems are not simply
reflections of competing vested interests, not competing views of the utility of
'country' for society. In many cases these conflicts reflect much deeper ontological
schisms between worldviews - between ways of seeing the world and ways of
thinking about peoples' places within the world" (Howitt 2001:59).
The nature of the ontological controversies stem from historically incompatible
experiences of resources and development. Ultimately decision makers and other key
stakeholders live in urban centres and have little or no knowledge of the ground situation
in the industrial areas and the people who live there. It is the assumption that this lack of
knowledge is more than ignorance and should be better described as a sustained effort to
not have to get involved in matters concerning the rural poor and their environment. To
uncover the real intentions of industrial developers in the government and the industry, the
use and incomes of land, water and minerals by different groups and the policies that guide
this usage can be uncovered with a careful analysis of available statistics, policies and other
data. Thus, a 'reality' will be constructed in order to evaluate the narratives of key power
holders. This is not to say that different groups will come to share the same ontology
despite shared information and analysis. At best the possibilities for negotiation and
27

28. compromise should increase after an exercise such as the one proposed in this research.
When the present is not agreed on future scenarios of the final outcomes of
industrialisation will differ widely. It is not assumed here that tribal people would freely
choose something that could be referred to as equitable mineral industrialisation but it is
also not assumed that they would not be interested in some of ‘modern’ life’s conveniences
in terms of better housing, roads and schools. Power is of vital importance for outcomes
and the question is then to understand who holds power and how this power is used. The
power to access the government apparatus including the policy makers, the police and the
courts will be of vital importance.
Data Collection
The data should be used to examine the gap between the rhetorical claims of industrial
development and modernisation (as evident from written sources and interviews) with not
only the ground evidence of neglect of tribal areas (as covered in a vast literature as well as
statistical sources) but also a neglect of public purpose in the sense that the state and a very
large section of its citizens actually stand to lose out given how mining is actually practised
in India today (with little ability to enforce environmental norms, widespread land
alienation for little employment generation, low royalties and widespread tax concessions).
Primary Data
Key Informant Interviews
A number of semi-structured interviews will be conducted for approximately 1 hour per
session. These will revolve loosely around a number of topics but will have no predetermined agenda to enable flexibility for the individual respondents. Interviews will be
mainly sought from people within the administration; politicians of various parties holding
elected office and the administrators. Especially important will be to gather the statements
within the ministries/departments of mines and commerce, tribal affairs and finance.
Attempts will also be made to systematically collect information from the local
administrators in and around the bauxite projects (especially from District Collectors but
also from Tribal Welfare Officers where possible). It will also be important to try to
estimate what industrialist viewpoints on industrialisation are. Local tribal leaders,
researchers, journalists and activists may be able to contextualise and provide different
opinions on interview responses.
28

29. Personal contacts are believed to be the best way to gain access to informants and
decision-makers in the administration and industry. Snowballing through interview
responses will be an additional way of identifying further interviewees. Interviews will
mainly be sought in the state capitals of Andhra Pradesh and Orissa, Hyderabad and
Bhubaneshwar respectively to understand state government positions. Since much of the
legislation is shared between the central government and the states interviews will also be
sought with concerned ministries in Delhi together with institutions like the Planning
Commission and the main industry associations.
Observation
From the corridors of bureaucrats and the industry offices in state and national capitals to
tribal farmers trying to make a living next to mining operations, observational techniques
are expected to provide some very useful information on the different worlds that power
holders and mining-affected people live in. At the same time it will not be possible to
capture more than a fraction of the multitude of cultural and social practices that are
present in the different tribes and castes who live next to the industrial areas.
Figure 5: Industrial Sites of Observation
Andhra Pradesh
•
Proposed project sites in Vishakapatnam, Vizianagaram Districts and
East Godavari districts for Jindal/APMDC* joint venture
•
Proposed project sites in Vishakapatnam and Khammam districts for
Ras al Khaima/APMDC joint venture
Orissa
•
Nalco Mine and Alumina Complex, Damanjodi, Koraput
•
Nalco Aluminium Smelter, Angul
•
Vedanta Alumina Refinery, Lanjigarh, Kalahandi
•
UAIL (Utkal Alumina) Alumina Refinery (under construction),
Baphlimali, Kashipur
•
Vedanta (under construction) and Hindalco Aluminium Smelters,
Jharsugoda
•
L&T Mine and Alumina Refinery proposed site, Kutrumali, Rayagada
district
29

30. * APMDC is the Andhra Pradesh Mineral Development Corporation, a government of Andhra Pradesh public
undertaking.
Secondary Data
Secondary data will be continuously collected while on fieldwork but can also increasingly
often be downloaded from various websites. The volume of secondary data available
means that it will be important to identify the key publications and data that needs to be
further analysed.
Policy Documents
Government policy statements including Planning Commission documents provide a rich
and varied source of information as different ministries at the central and state levels
continue to produce documents for different purposes. These are nowadays often available
online for easy access. Judgements in Supreme and High Courts and other legal and
Constitutional texts can often situate contentious issues and be very useful sources for
situating debates.
Memorandums of Understandings are especially important when trying to evaluate
government-business relations and the potential benefits and costs associated with business
deals. Some of these documents are available but many will remain secret.
The Economics of mining can be evaluated quite clearly by using the public sector
company Nalco as a case study. This company has been operating in two locations in
Orissa since the 1980s and provides publicly available accounts through its annual reports.
The economics of the other bauxite companies with similar or planned operating
procedures will be evaluated using Nalco as the norm.
30

31. Table 2: Key indicators to determine the costs and benefits of mining.
•
Costs
o Cost of excavation and transport
o Forest clearance (Net Present Value given by the Supreme Court after
the TN Godavarma judgement)
o Water usage
o Carbon dioxide usage (huge cost if converted to energy-intensive
aluminium)
•
Benefits (state and national benefits should be separated)
o Royalty (Set by the national government based on sales price)
o Income taxes and Excise (if not declared as Special Economic Zone)
o Other fees and charges
o Employment - new factories are not likely to employ more than a few
hundred people. Most of these will not be from the local area
The income of various taxes and fees from the mineral industry will be shared between the
national and state governments whereas the costs are almost uniformly carried by the
immediate area around the industry. Of special interest is not only what the states make
from mining and industry operations but also how much of this money is routed back to
the areas where the minerals came from originally. State capital regions are significantly
better off from the mining areas economically and do not have to face the direct negative
consequences. Important issues to investigate will be to what extent there is a willingness
to share income within the states and what understanding policymakers have of the local
costs of mining carried by the people living in the mining areas.
31

32. Table 3: Determining the National and State Earning from Mining
•
What is the central and state governments' income from mining?
•
What is the central and state governments' income from related processing
industry of alumina refineries and aluminium smelters? Does this income
vary if the company is public or private?
•
Who are the beneficiaries of low mineral royalties from mining and who
would benefit from state governments insisting on only giving mine leases
to companies investing in refineries within the state?
•
How are the states distributing the wealth from mining within their
Clearances remain a vital part of industrialisation despite many having been reduced or
even redundant following the economic liberalisation program. The main problem is that
all clearances are one-off trials during start-up or expansion and after this there is no or
little reliable information on how the facility is actually run and managed. The inspections
that do take place are carried out by the Indian Bureau of Mines whose employees do visit
most large mines but fail to take corrective action even when discrepancies are found for
complex reasons. Gaining access to clearance-related information has recently been made
easier through the Right To Information Act.
Table 4: Mandatory Clearances for Mining Projects
•
Environmental (according to Environmental Protection Act and
Forest Conservation Act)
o The most important form of clearance and the one where the
public can voice an opinion. Massive protests are always present
at meetings, often organised by political parties in opposition
o Also to a limited extent for social impact analysis
•
Tribes Advisory Council
o Body of tribal MLAs dominated by the large parties
•
Local Gram Sabha
o Differently empowered in different states (according to PESA)
•
Indian Bureau of Mines - Mine Clearance
Land Records and Mining Leases should be able to reveal in whose name different
industries and mines are being promoted and what the actual extent of mining is. It would
32

33. e.g. be very interesting to clarify whether non-tribals have their names on leases in Andhra
Pradesh since this would go against the law. It remains in doubt whether it will be possible
to gain access to the records that are held by the departments who have most to gain
economically from not settling tribal land titles, the Revenue and Mines departments. Even
when accessed manually going through these records will be a very burdensome task likely
to take significant amounts of time. Statistics on land use, land ownership and tribal land
alienation may be available from various other sources like ICRISAT in Hyderabad and the
World Bank.
Satellite Imagery
A further useful tool for exploring environmental change in the Scheduled Areas would be
to use satellite imagery. High-resolution images can show details of buildings and factories
including mine sites and tailings dams. If landscapes facing large-scale environmental
degradation due to open cast surface mining can be captured it can then be inferred that
the people living there, or in many cases who used to live there, have seen significant
negative impact on their ability to make a living from the land and the forests.
33

34. Figure 6: The iron ore mines of Keonjhar District, Orissa, cover vast areas of land. Black
soot from sponge iron factories have further degraded the land seen at the bottom of the
photo.
Source: Screen capture from Google Earth 29/3 2006
When the satellite images are updated (Google Earth seems to update roughly every year)
they can also be used to track environmental change over time. The problem with current
satellite imagery services is that they often do not have high-resolution images available
outside of the main cities limiting the image analysis to overviews rather than detailed
examination. The image above is an overview and interesting as such since the
environmental damage is spread over a large enough area to be clearly visible. It would not
be sufficient to pinpoint particular sources of pollution or the exact locations and sources
of forest degradation for example.
Timeline
The timeline for fieldwork and future write-up is available in the Appendix on page 39. A
reconnaissance trip to India was made in October 2006. This was followed by fieldwork
from January to May 2007. After initial analysis of the collected data on this fieldwork trip
has been made a second trip is being planned for October to December 2007.
34

35. Ethics in Research
Research will involve fieldwork in some of India's poorest areas and deal with historically
disadvantaged groups of tribal people. This raises a number of ethical concerns that will
have to be addressed in the research design. Most important is to recognise the
vulnerability of tribal groups and the various ways in which research potentially could put
them at risk. Poverty, lack of education and access to various forms of resources, together
with the indifference of authorities, puts tribal people at multiple risks. As recent
confrontations between authorities and tribal groups show, mining is becoming an
increasingly contentious issue especially in Orissa and this will also be important for the
research to consider. Care must be taken so that respondents do not feel that participating
in research will put them at risk of being perceived as against the government or mining
development in general, something which could have negative repercussions for
individuals. Participants in research will be fully informed about the content and purpose
of research and will sign a form declaring willingness to participate. In the case that
respondents are illiterate, the consent form will be read in local language and witnesses will
be there to verify and record that the respondent understands and wishes to participate.
Responses from all participants will be kept strictly confidential with the researcher and
anonymous to safeguard any potentially controversial responses. Participating in the study
will be on a voluntary basis and each individual will have the right not to participate.
Since mining is a contentious issue where as of yet no middle-ground position exists it
might be difficult to be perceived as a neutral researcher, in fact this might even be
impossible. A perception of the researcher as pro-mining will mean that tribal people and
social movements will not be interested in participating in research while being anti-mining
might be equal to being 'anti-development' and thus contentious to government officers.
Balancing these various forces in an ethical manner will be one of the main challenges
during fieldwork.
References
Auty, R, and RM Auty. 2001. Resource Abundance and Economic Development: Oxford
University Press, USA.
'Balco Judgement' (2001). Verdict of the Supreme Court case 'BALCO Employees Union
Versus Union of India & Ors. Respondents', Supreme Court of India: Delhi
Ballard, C. and G. Banks (2003). Resource wars: the anthropology of mining. Annual Review
of Anthropology 32: 287-313.
Bardhan, P. (2005). Scarcity, conflicts, and cooperation: essays in the political and
institutional economics of development. Cambridge, Mass., MIT Press.
35

36. Bardhan, P. (1998). The political economy of development in India. Oxford, Oxford
University Press.
Baviskar, A. (2003). Tribal politics and discourses of Indian environmentalism. in Nature in
the global south: environmental projects in South and Southeast Asia/Greenough, P. and
Lowenhaupt Tsing, A., (eds). London: Duke University Press.
Bulte, E., Damania, R. and Deacon, R. (2005) Resource intensity, institutions, and
development, World Development 33(7): 1029-1044.
Collier, P, and A Hoeffler. 2005. "Resource Rents, Governance, and Conflict." Journal of
Conflict Resolution 49:625-633.
Corbridge, S., G. Williams, et al. (2005). Seeing the State: Governance and Governmentality in
India, Cambridge University Press.
Corbridge, Stuart, and John Harriss. 2000. Reinventing India: liberalization, Hindu nationalism
and popular democracy. Cambridge: Polity Press.
de Haan, A. (2004). "Disparities within India's poorest regions: why do the same
institutions work differently in different places?". Background Paper for, World
Development Report 2006 - Equity & Development. Washington, World Bank Group.
Fuller, CJ, and J Harriss. 2000. "For an Anthropology of the Modern Indian State." The
Everyday State and Society in Modern India:1–30.
Godoy, R. (1985). Mining - anthropological perspectives. Annual Review of Anthropology 14:
199-217.
Government of Andhra Pradesh (1 July 2005). Memorandum of understanding between
Government of Andhra Pradesh and Jindal South West Holding Ltd.
Government of India. (2006a). Mineral royalties, Indian Bureau of Mines: Nagpur
Government of India (2006b). National Mineral Policy - Report of the High Level Committee,
Planning Commission: Delhi
Hajer, M.A. and H. Wagenaar, eds. (2003). Deliberative policy analysis: understanding governance in
the network society, Cambridge: Cambridge University Press.
Harriss, J. (2006) Power Matters - Essays on Institutions, Politics, and Society in India. Delhi:
Oxford University Press
Harriss, J. (1999). Comparing political regimes across Indian states - A preliminary essay.
Economic and Political Weekly 34(48): 3367-3377.
Harriss, J, K Stokke, and O Törnquist. (2004). Politicising Democracy: The New Local Politics
and Democratisation: Palgrave Macmillan.
Herbst, J. (2001). The politics of revenue sharing in resource-dependent states, United Nations
University, World Institute for Development Economics Research.
Howitt, R. (2001). Rethinking resource management, London: Routledge.
Indian People's Tribunal (2006). Kashipur: An Enquiry into Mining and Human Rights Violations
in Kashipur, Orissa, Report of the Indian People's Tribunal on Environment and
Human Rights Tribunal, available on http://www.iptindia.org/
Jenkins, R. (2004). Regional Reflections: Comparing Politics Across India's States, Oxford
University Press.
Jenkins, R. (1999). Democratic politics and economic reform in India. Cambridge: Cambridge
University Press.
Knapp, A. B. and V. Pigott (1997). The archaeology and anthropology of mining: Social
approaches to an industrial past. Current Anthropology 38(2): 300-304.
Kohli, A. (2006). Politics of Economic Growth in India, 1980-2005: Part II-The 1990s and
Beyond. Economic and Political Weekly April 2006: 1361-1370.
Kohli, A. (2004). State-directed development: political power and industrialization in the global
periphery. Cambridge, Cambridge University Press.
Kohli, A. (2001). The Success of India's Democracy, Cambridge University Press.
36

37. Kumar, K. (2005). Dispossessed and displaced: A brief paper on tribal issues in Orissa, Unpublished
document, Bhubaneshwar: Vasundhara
Kumar, K. and Choudhary, P., R. (2005). A socio-economic and legal study of scheduled tribes’ land
in Orissa, Bhubaneshwar: Vasundhara
Kumar, M. (2004) Subaltern politicization in Jenkins, R. (ed) Regional reflections: Oxford
University Press.
Lahiri-Dutt, K. (2006). May god give us chaos, so that we can plunder: a critique of
resource curse and conflict theories. Development 49(3): 14-21.
Laxman Rao, S., Deshingkar, P. & Farrington, J. (2006). Tribal Land Alienation in Andhra
Pradesh - Processes, Impacts and Policy Concerns, Economic and Political Weekly
Le Billon, P. 2000. "The Political Economy of Resource Wars." Angola’s war economy–the
role of oil and diamonds.
Mooij, J. E. (2005). The politics of economic reforms in India. New Delhi: Thousand Oaks/Sage
Publications.
Mooij, J. E. (2003). Smart Governance? Politics in the Policy Process in Andhra Pradesh,
India. ODI Working Paper 228, Overseas Development Institute: London
Moore, M. 2004. Revenues, state formation, and the quality of governance in developing
countries. International Political Science Review 25:297-319.
NSS. (2001). Level and pattern of consumer expenditure in India 1999-2000, Report 457, National
Sample Survey Organisation, New Delhi.
Pati, B. (2001). Situating Social History - Orissa 1800-1997. Hyderabad: Orient Longman
Limited
People's Union for Democratic Rights, PUDR (2005). Halting the Mining Juggernaut: People’s
Struggles Against Alumina Projects in Orissa, available on www.pudr.org
Roe, E. (1994). Narrative policy analysis: theory and practice. Durham, N.C; London, Duke
University Press.
Ross, M. (2004). Mineral wealth and equitable development. Background Paper for: World
Development Report 2006 - Equity & Development. Washington: World Bank Group.
Ross, M. 2003. "Natural Resources and Civil War: An Overview." Paper submitted to the
World Bank Research Observer, August.
Ross, M. (1999). The political economy of the resource curse. World Politics, 51, 297–322.
Rosser, Andrew, University of Sussex. Institute of Development Studies, and Centre for
the Future State. 2006. The political economy of the resource curse: a literature review.
Brighton: Institute of Development Studies University of Sussex.
Rudolph, L. I. and J. K. Jacobsen (2006). Experiencing the State, Oxford University Press.
Rudolph, L. I. and S. H. Rudolph. (2001). "Iconisation of Chandrababu." Economic and
Political Weekly: 1541.
Rudolph, L. I. and S. H. Rudolph (1987). In Pursuit of Lakshmi: The Political Economy of the
Indian State, University of Chicago Press.
'Samatha Judgement' (1997), Verdict on 'Samatha Vs State of Andhra Pradesh' delivered on
11.07.1997. Supreme Court of India: Delhi
Saxena, N. C., J. Farrington, et al. (2003). Trends and prospects for poverty reduction in rural India:
context and options. London: Overseas Development Institute.
Scholtz, E. (2006). Negotiating claims: the emergence of indigenous land claim negotiation policies in
Australia, Canada, New Zealand, and the United States. New York: Routledge
Scott, JC. 1999. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have
Failed: Yale University Press.
Singh, C. (1986). Common property and common poverty: India's forests, forest dwellers and the law.
Delhi: Oxford University Press.
Sinha, A. (2005). The Regional Roots of Developmental Politics in India: A Divided
Leviathan, Indiana University Press.
37

38. Suri, K.C. (2005) The dilemma of democracy: economic reforms and electoral politics in
andhra pradesh in Mooij. J.E. (ed) The politics of economic reforms in India. New Delhi:
Thousand Oaks/Sage Publications.
Wright, G, and J Czelusta. 2004. "The Myth of the Resource Curse." Challenge 47:6–38.
Xaxa, V. (1999). Tribes as indigenous people of India. Economic and Political Weekly Nov 26:
5105-5113.
38

39. Appendix 1 - State Income from Royalties
Table 5: Mineral Royalties from Metals and Other Important Minerals from Selected
States (continued on next page)
Madhya
Jharkhand
Orissa
Chhattisgarh Rajasthan
Karnataka
Pradesh
Iron ore
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
207.7
422.6
359.3
0.1
53.8
2003-04
182.2
593.2
429.2
0.2
462.9
2004-05
235.2
728.5
423.3
1.5
797.5
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
12.5
65.9
277.4
39.8
1.5
2003-04
11.9
70.6
254.2
52.8
1.0
2004-05
12.6
105.4
290.5
81.8
2.2
0.0
0.0
0.0
0.0
2002-03
76.9
2.2
2003-04
62.7
2004-05
92.0
1.4
0.0
0.0
Bauxite
Copper
Chromite
2002-03
0.0
0.0
21.4
23.1
37.7
0.0
0.0
0.0
0.0
181.8
0.8
2003-04
272.5
2004-05
440.3
Lead & Zinc
0.0
0.0
0.0
3.5
2.5
0.0
0.0
2002-03
850.4
2003-04
1,032.0
2004-05
0.0
1,512.3
Lime stone
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
1,139.6
31.8
81.1
586.0
936.2
444.9
2003-04
1,017.0
29.4
83.7
576.9
951.9
510.5
2004-05
1,199.5
30.8
103.5
620.6
1,165.6
542.4
Coal/Lignite
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
4,502.6
7,320.7
3,107.3
4,340.8
23.9
2003-04
5,141.0
8,363.7
3,860.0
5,124.3
34.2
2004-05
5,339.5
8,357.4
4,419.0
5,555.0
28.7
Source: Adapted from Government of India (2006b)
39

40. Table 6: Total Mineral Royalties from Selected States
Madhya
Jharkhand
Orissa
Chhattisgarh
Rajasthan
Karnataka
Pradesh
Major
minerals
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
5,837.6
7,656.5
4,173.5
5,368.2
2,255.0
510.7
2003-04
6,335.0
8,675.6
5,196.0
6,231.5
2,569.8
1,035.7
2004-05
6,825.2
8,760.2
6,191.0
6,745.6
3,407.5
1,466.7
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
69.3
320.0
232.2
155.4
1,741.8
328.2
2003-04
132.4
326.0
276.4
140.2
2,009.8
400.5
2004-05
512.0
401.4
445.4
200.5
2,490.4
642.7
0.0
0.0
0.0
0.0
0.0
0.0
2002-03
5,906.9
7,976.5
4,405.7
5,523.6
3,996.8
838.9
2003-04
6,467.0
9,001.6
5,472.0
6,371.7
4,579.6
1,436.2
2004-05
7,337.2
9,161.6
6,636.0
6,946.1
5,897.9
2,109.4
Minor
minerals
Total royalty
Source: Adapted from Government of India (2006b)
40

41. Appendix 2 - Timeline
2005
PhD Plan
Oct …
Work on Procedural
Feasibility Trip to India
PP Presentation
Fieldwork Trip 1
In Delhi
In Andhra Pradesh
In Orissa
Initial Data Analysis
Fieldwork Trip 2
Data Analysis
Writing Up
2006
2007
Sep Oct Nov Dec Jan Feb Mar Apr May …
2008
Sep Oct Nov Dec Jan
2009
…
Jan
Feb
Mar
41