Why Are Mineral-Rich States Like Odisha and Jharkhand the Most Backward and Underdeveloped in India?

Odisha and Jharkhand, despite their abundant mineral resources, stand among the most underdeveloped states in India. While it is often claimed that these states are poor, the reality is far more complex. They are not poor, but rather exploited, through a cycle that perpetuates their underdevelopment and backwardness. This cycle is driven by a combination of factors, notably poor governance, lack of education, and the prioritization of short-term economic interests over long-term socio-economic well-being.

Defining 'Poor' States

The term 'poor' in the context of Indian states is multifaceted. Statistical measures such as GDP per capita income, poverty rates, overall GSDP, social development indicators like maternal mortality rate (MMR), infant mortality rate (IMR), and doctor-to-population ratio, literacy rates, and Human Development Index (HDI) rates are used. When these indicators are analyzed, Odisha and Jharkhand are indeed among the worst performers.

Similarities Among Underdeveloped States

A closer look reveals several similarities among these states. High tribal and Dalit populations, difficult terrains, and inability to tap into natural resources stand out.

Tribal and Dalit Populations

The tribal and Dalit populations in Odisha and Jharkhand are disproportionately high. These communities have been exploited for centuries, with little benefit accruing to them from India’s growth. Mineral resources in their regions have been exploited by outsiders, who have become rich, while the local population remains underdeveloped.

Difficult Terrain and Infrastructure

A significant portion of these states is hilly, making agriculture challenging. As a result, these areas have historically been less affluent and continue to face infrastructure challenges, such as low railway density. Improving infrastructure remains a significant challenge.

Inability to Tap Natural Resources

Despite abundant natural resources, these states have struggled to fully exploit these assets. Central government policies, such as freight equalization, have negatively impacted their economies. These states must address these issues to harness their potential.

The Role of Government Policies

Historical policies, including the licence raj and socialist policies implemented before 1991, greatly restricted the ability of Indian businessmen to start and grow businesses. This made it difficult to utilize natural resources for wealth creation and job generation. Liberalization and new industry policies have gradually improved conditions, with states like Odisha making significant strides. However, the cycle of poor governance and underinvestment persists.

Towards a More Industrialized Future

Despite these challenges, there are signs of progress. The entrepreneurial spirit is evolving, and these states are expected to grow rapidly in the next two to three decades. They are poised to become leaders in industrial growth, much like Gujarat, Maharashtra, and Tamil Nadu.

Future development will depend on continued investments in education, infrastructure, and governance. Only with these improvements can the potential of these mineral-rich states be fully realized.