You are on page 1of 10

Growth potential of Mining Sector in Odisha and its contribution to

Employment generation

Abstract
In this assignment an attempt has been made to show the economic significance of mining sector
in the context of Orissa Economy in terms of value of total extractions, total employment
generation and contribution of mining sector to State Gross Domestic Product and total revenue
generation. India is well endowed in terms of most minerals. The country produces as many as
87 minerals, including 4 fuel minerals, 10 metallic minerals, 47 non-metallic minerals, 3 atomic
minerals and 23 minor minerals. Despite being the highest mineral rich state of the country, the
state was designated as one of the poorest states because benefits of mining had gone to few
hands caused by large scale corruption. In this paper we have explored how the proper
consumption of mineal resource has resulted in change in economic condition of Odisha by
providing necessary employment.

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

BACKGROUND

Role of Employment in Economic Growth:


Employment has always featured as an element of development policy in India. The
priority and attention it has received in development plans have, however, varied from time
to time and so have the approaches and strategies as well as policies and programmes for
employment generation. When India embarked on a strategy of industrialization-based
development in 1950s, employment was not perceived to be a major issue in so far as a
relatively faster growth of economy as envisaged in the consecutive Five Year Plans was
expected to generate enough employment, particularly in industry, to take care of a small
backlog of unemployment at the time and increase in labor force that was expected to be
relatively modest. Ensuring a regular and adequate supply of suitably skilled workforce was
conceived to be a matter of greater concern. Improving the quality of employment, in terms of
reasonable and rising level of wages and a minimum measure of social security against the
common risks of work and life was, however, considered an important concern of state policy.
Growth of employment emerged as an important concern in development planning around the
middle of 1970s.

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Growth-Potential ?
The Indian market has a huge growth potential in terms of steel consumption.As per the National
steel policy, 2005, the growth in steel sectors has been anticipated to reach 100 million tonnes by
2019-20 from a level of 38 million tonnes in 2004-05. To keep up to this target, the Government
of India is actively encouraging steel consumption so that the steel industry acts as the
locomotive for the overall economic growth of the country. In addition, the country's rich mineral
resources and availability of skilled labor makes it an attractive destination for investment. On
the other hand, India will be able to derive huge benefits in terms of employment generation,
revenues and FDI inflow. In addition, this project will proffer mutual cooperation and amity
between India and Korea.
The POSCO-India project will create enormous opportunities for developing ancillary and downstream industries close to the steel plant. There is a vast scope of indirect employment
opportunity once the ancillary industries are set up in the area.
A mega integrated steel plant such as POSCO, to be built in Orissa, will lead to significant
growth and investment in the country. Owing to the unique nature of the steel industry, which
requires large equipment facilities, the project is envisaged keeping in mind the operations of 30
to 50 years. The project will extensively contribute to the development of India's economy and
society at large.
Apart from mega projects there is ample avenue for growth of existing sponge iron plants &
setting up of smaller ancilliary industries in the state.

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Mining Sector and Its Impact on Odisha Economy: Proper


Utilization of Limited Resources:
The Economy of Odisha is one the fastest growing state economies in India. According to 201415 economic survey, Odisha's Gross State Domestic Product(GSDP) was expected to grow at
8.78% in the 2014-15 fiscal year . Minerals have been major natural resource exploited by
humans from times immemorial. The rapid industrialization and infrastructure development has
resulted in increased demand and large scale exploitation of the mineral resources.. It has also
identified key priority areas such as enhancing resource and reserve base through exploration and
internal acquisition, reducing permit delays, putting in place core enablers infrastructure, human
capital, and technology), ensuring sustainable mining and sustainable development around
mining; emphasis has been laid on creating information, education and communication strategy
to achieve the goal. In this regard, National Mineral Policy, 2008, recognizing minerals as vital
raw material for infrastructure, capital goods and basic industries, emphasizes on the need for
adoption and use of scientific methods for maximizing mineral exploration and prospecting for
mining, beneficiation and economic utilization Odisha is one of the mineral rich states of the
country having a special distinction in the countrys overall mining sector. It has attracted large
scale private investments to mining sector in last two decades. Large scale illegal mining in
Orissa has caused damages for the economy as a whole, particularly the life of tribals who are
the inhabitants of mining area. Keeping this in view, the paper examines the significance of
mining for the growth of the economy and to discuss the sources of corruption in this activities
and its socio-economic and environmental impact around the mining area.

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Economic Significance of Mining in Orissa Economy


The total value of minerals produced in Odisha is highest in the country. Its share in the all India
total is 11.89% while it is 7.13% for Rajasthan and 6.74% for Gujarat. The contribution of other
states like Madhya Pradesh, Assam, Andhra Pradesh, and Karnataka is 4.99%, 4.79%, 4.63% and
3.78% respectively (Indian Bureau of Mines). As per the Odisha Economic Survey 2011-12,
state ranks highest in India in recent years in term of value of output of minerals and its share has
been increasing. The mining sector contributes about 7.3% of the real GSDP of Odisha. In terms
of value of mineral production, mineral production at national level had the share of 25.64%. It is
indicated that though Orissa is having the highest resource base, the contribution of minerals to
SGDP is not satisfactory. Being a favored investment destination of global investors, this sector
seems poised for rapid growth. But the irony of the situation is that despite being the most
mineral rich state, it is one of the poorest state of the country, few people of the state are
becoming rich capitalist at the cost of the state natural resources. The workers participation ratio
in Odisha at 41.8 percent was slightly higher than 39.8 percent at the national level in 2011.
The share of marginal workers in the total workforce increased substantially from 33 percent in
2001 to 39 percent in 2011, while the share of main workers declined from 67 percent in 2001 to
61 percent in 2011. As per the NSS data, the rate of unemployment in the State has fallen lately from the 61st round (July 2004-June 2005) to the 68 th round (July 2009-June 2010). This stands
true for both rural and urban areas and among casual workers and also those who have full time
jobs. But the States unemployment rate in rural area is marginally higher than the national rate
of unemployment, while it is lower than all India average in case of urban areas.

Significance of Mining in terms of Employment Generation


The indicator of the economic significance of sector is often reflected through its
employment generating capacity as India as well as Odisha has been experiencing high.
incidence of unemployment since independence.
Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Odisha plans to introduce e-auction in mineral sector


The Odisha government in 2012 declared about its planning to introduce e-auction mode of
selling bulk minerals like iron ore, manganese and chrome to infuse transparency into the
mining-sector. Meanwhile, the state government has set up a five- member panel headed by steel
and mines secretary Rajesh Verma to decide the roadmap for e-auction .The panel have Mohanty,
chairman and managing director of state controlled Odisha Mining Corporation Saswat Mishra
and one representative each from the law & finance departments as board-members .All users of
e-auction platform will have to register with the MSTC website either as buyer or seller.
Registration of buyers and sellers will be a continuous process. Users from the Odisha
government will be provided with a master password by MSTC for monitoring purpose.

Impact of mining on Tribals livelihood


Mining in Orissa has generated employment despite of other controvercies which spans
encroachment of forest areas, underpayment of government royalties, and conflict with tribals
regarding land-rights. The spill-over of the effects of illegal mining into problems such as and
the distortion of Indian democracy by mixed political and mining interests, has gained
international attention. Bauxite and coal mining by in tribal areas of have led to conflicts in land
rights Coal mining has run into trouble as well in district over land issues. The livelihood of
lakhs of tribals was affected due to closure of mines in both Sundergarh and Keonjhar districts
due to loss of employment .

There have been changes in financial condition due to mining. It is reported that there marginal
income has also increased in every family due to employment.
Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Odisha Mining Corporation to train tribal students for jobs in


mining sector:
Odisha Mining Corporation (OMC) has agreed to provide technical training to tribal youths in
mineral bearing areas for engagement in mining and other activities, as part of the state
government's skill development plans.
The proposal was first mooted by Department of Technical Education and Training (DTE&T).
OMC agreed to implement the proposal under its corporate social responsibility (CSR)
scheme."The proposal of DTE&T for hands-on apprenticeship training of 15 trainees each in
mechanic earth-moving machinery and riggers trades who have completed one year basic
training at government ITI, Barbil shall be conducted by OMC Ltd in its mining industries
preferably in Keonjhar district by the end of December 2014," the state-run undertaking said in a
letter to the steel and mines department.It admitted that there is a need for skilled manpower in
mining and allied sector and it needs to employ local unemployed youths.
"Government ITIs at Barbil, Anandpur and Talcher are in the process of introducing some trades
in the mining sector during August 2015 session. These ITIs shall be supported with used heavy
mining equipment and machineries by OMC Ltd for hand-on practice of the trainees," it said in
the proposal.
OMC also has plans to provide light motor vehicles to impart driving trainings to youths in naxal
affected areas of the state at selected government ITIs. Besides, it has plans to set up a model
training school at Puri with an investment of Rs 25 crore for training in multiple sectors.
"The sector based skill training in manufacturing, mining and allied technology, automobile,
tourism and hospitality, agro-mechanisation, entrepreneurial training, soft skill etc shall be
implemented by providing training to graduates and other unemployed youth suitable for
employment or self employment. The DTE&T shall prepare the detailed project report with

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

financial requirement of Rs 25 crore for infrastructure like hostels and staff quarters etc," OMC
said in its proposal report to the government.
Table 2.1: Workers in Odisha: 2001 & 2015
Sl. No
1
2
3
4
5
6
7
8
9
10
11
12

Item
Unit
Total Population
lakh
Total Workers
lakh
Total Main Workers
lakh
Total Marginal Workers
lakh
Proportion of total workers to total population
Percent
Main workers to total workers
Percent
Male workers to male population
Percent
Female workers to female population.
Percent
Cultivators to total workers
Percent
Agriculture Laborers to total workers
Percent
Workers engaged in house hold Industry to total workers Percent
Other workers to total workers
Percent

2001
368.05
142.76
95.89
46.87
38.79
67.17
52.5
24.7
29.7
35.0
5.0
30.3

2011
419.74
175.42
107.08
68.34
41.79
61.00
56.11
27.16
23.4
38.4
4.5
33.7

ANALYSIS:
Per capita income is an important indicator of standard of living of the people. The rising trends
of per capita real Net State Domestic Product (NSDP) for Odisha from 2004-05 to 2014-15 at
Market prices at 2004-05 prices are presented in Figure 2.2. The per capita income (real NSDP)
of Odisha during 2014-15 is estimated at Rs.28,384 as per the advance estimates, which
accounted for a growth rate of 7.31 percent over 2013-14. Before the beginning of the 11th Plan,
i.e., during 2006-07, the per capita income of Odisha was Rs.21,585. It increased to Rs.25,847 in
2011-12, i.e., at the end of 11th Plan, registering a growth of 19.74 percent during the 11th plan
period. Odisha has been continuously striving to bridge the gap in the real per capita income with
the national average. the gap in real per capita income between Odisha and the national average
has been reducing over the recent years

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Conclusive Remarks:
Significance of Mining in terms of Employment GenerationThe indicator of the economic significance of sector is often reflected through its employment
generating capacity as India as well as Odisha has been experiencing high incidence of
unemployment since independence.
Mining and Quarrying provides employment to different sections including tribal
groups. The above discussion shows the number of workers directly engaged in various mining
activities from 2004-2015 .There has been negative growth in some of the years because this
sector has been increasingly employing labour-saving and capital-intensive production
techniques and technology over the years. However, the employment has touched 51,877 by the
end of 2014-2015 showing an increase of 18.7% over 2013-2014.From equity point of view the
mining sector is not conducive for poverty alleviation through employment generation.

Conclusion:
The issues relating to much discussed emplotment scarcity problem have brought no good for the
Odisha Economy. But gradually Odishas economy has shown a sensitive growth that has caused
bydevelopment in its economic condition resulted from employment in mining sector. The
revenue incurred from mining sector have been used for social sector development of our state
,economic condition of our, causing equality in the society.. The responsibility of the
infrastructural development of the mining area should be vested on the benefitted private sector.
It is known fact that mineral resources are finite. Keeping in the requirement of the industries,
there should be proper balance between exploitation and augmentation maximum utilization
from minimum consumption should be our priority.

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26

Growth potential of Mining Sector in Odisha and its contribution to


Employment generation

Pratikshya
Priyasmita Sahoo
Registration
Number- PGDM/2015-17/26