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Industrialisation in Kalahandi, problems and prospects

Industrialisation has come to be regarded as synonymous with economic development. It is a process in which there is a sharp increase in the industrial share of GDP and of the labour force. It is through industrialisation that the centre of gravity of the economy moves from Agriculture to Industry. Industrialisation implies two things:

  • Adoption of superior technology for production to transform raw materials and intermediate goods in to manufactured goods
  • Application of modern techniques of management and organisation like economic calculations, accountancy and management techniques

By industrialisation in Orissa means ‘Mining’ and export of minerals to earn foreign exchange. It further means a process whereby we can invite foreign investment from abroad, utilising it to establish big mineral based industries to increase the standard of living of the people.

The Economic Survey Report Investment and resultant employment generation in the State of Orissa is as follows:


Capital Investment and Employment Generation in Orissa

Sl. No.IndustryCapital Investment (%)Employment Generated (No)Employment Generation (%)
1Mining78%1 Lakh and more3%
2Large, Medium Scale Industries11%83 Thousand and more2.5%
3Small Scale Industries8%4 Lakh 30 Thousand18%
4Cottage Industries3%26 Lakh 74 Thousand81%

So for as Rs 1 Crore investment in the above four categories of industries are concerned it is seen that number of employment generation is as per Table No. 2


Employment Generation per Rs 1 Crore Capital Investment

Sl. No.Type of IndustriesEmployment Generation  (In Numbers)
2.Large Medium Scale Industries40
3.Small Scale Industries282
4.Cottage Industries4475

Thus we find that the Cottage Industries has a large capacity of employment generation as compared to other types of Industries for the given capital Investment.

In Orissa, industrialisation started with the following objectives:

  • Alternatives sources of  augmenting economic activities
  • Scope for higher income
  • High degree of employment
  • Optimum utilisation of natural resources
  • Generation of gainful local employment

As per the study conducted by Keshaba Das, Orissa constitutes 2% of the industrial output, employment and manufacturing value added at the national level only above Assam, Orissa is the least industrial state among the 15 major states in India.

We wanted to access the pros and cons of industrialisation in Orissa with special reference to Kalahandi district. We based the study on the overall industrial performance of the whole district. The sources of data are both primary and secondary data.

Kalahandi district in brief

Kalahandi is one of the KBK districts, of Orissa, covering an area of 7920 square kilometres situated towards the South-West of the state. It has 13 CD Blocks 273 GPs and 2008 inhabited villages. Basically an agricultural district with 13.34 Lakh population as per 2001 Census has the Industrial situation as follows:


Industries in Kalahandi district

Sl. No.Type of IndustriesEmployment Generation  (In Numbers)
1.Small Scale Industries601
2.Sick Industries225
3.Working Industries376
4.Healthy Industries250

            Kalahandi is a mineral rich district in the state with a large deposit of minerals.


Mineral deposits in Kalahandi

Sl. No.Name of OreNo of working MinesArea Covered (In Hectors)Output in (MT)Value of Output (Lakh)
2Gem Stone101625

            A part from this the district has a large deposit of Bauxite:


Bauxite deposit in Kalahandi district

Sl. No.Place / Hills/ MountainDeposits (In Tonnes)
1Karlapat Polingpadar22 Crores 40 Lakh
2Kutrumali Tangri Dongar4 Crores
3Sijimali Kisanmal22 Crore 40 Lakh
4Niyamgiri Lanjigarh7 Crores 30 Lakh

A detailed study of industrialisation in Kalahandi district suggest that most of the efforts to start an Industry in the district has proved to be a failure.

A review of the industrialisation of the district state that, it basically comprises of rice mills. As it has about 200 rice mills. In 1993 first major industry was started in Junagarh area known as The Western Sugar Chemicals Limited  to process 1250 TPD and ancillary chemical industries. However, lack of commitment has disappointed the farmers. The second major industry is the The Spinning Mills at Kesinga with ultra-modern facilities got started to fulfil the aspirations of the vast majority of cotton growers of the locality. Needless to say that Kalahandi grows the best quality of cotton in the country. However to the dismay of the cotton growers, owing to the lack of interest and initiative on the part of the Government, the project could not materialise. A food processing Industry started at Biswanathpur with private initiative, could not be completed. Inspite of a large variety of fruits available in the district, still the project of food processing failed. A biscuit factory at Kesinga started and also stopped because of the lack of commitment on the part of the proprietors. Kesinga Paper Mills also suffered with the same fate, Baring a few small scale industries like fabrication units, rubber tube industry, rice mills, cottage industries like wood craft at Khairpadar, stone curving at Ampani, paddy crafts, Terracota in Thumul Rampur etc. there was no big industries which came to the district till the arrival of Vedanta Alumina. This industry came with a good amount of irregularities like with no forest, environmental clearance, causing degradation of environment, ecology and the very bio-diversity of the district. It is to disturb the life, living, culture, livelihood of the people of the locality.

Challenges of industrialisation in Kalahandi

  • The first and for most problem relating to Industrilisation in Kalahandi is    lack of interest and commitment on the part of the entrepreneurs to develop an industry in the district. Instead they are interested for the subsidy as in most cases the owners from outside the state were busy in was being their hands in the following the Ganges of subsidies.
  • The lack of local initiative to establish an industry in the district except  some Rice Mills pose a problem for which outsiders (People from outside the state) get a chance to establish industries without their commitments.
  • The establishment of Alumina Industry has a good amount of          environmental and ecological problems as it is highly polluting industry as it is evident from NALCO and other such Industries were discouraged in  most developed countries in the world.
  • The excavation of Bauxite from Niyamgiri Hills will cause a great deal of environmental problem as the very existence of the Hill is a source and   cause of rainfall in the district as pointed out by the Meteorological experts. It is the existence of the Hill that the clouds gather and cause rainfall owing to monsoon flow. Mining will disturb the climatic condition of the district Since the Honourable Supreme Court has given its verdict in favour  of the  company in the mean time, the hard day are nearby for the district.
  • Niyamgiri is a source of water for the whole district and it is the origin of   the Nagabali and The Basunjhara, this apart there are 36 different streams perennially flow from the hills which provide and enrich the water   availability of the district. It also recharges the ground water of the district.
  • The Red Mud Pond S- Ash Pond at Lanjigarh Alumina Plant has already contented water of the Nagabali river as a result of which the PH value of the water increased then the prescribed limit as was inspected by the representatives of the Environment and pollution control Board of the state.
  • Alumina Plant require a large amount of water as it takes 300 Lakh liters of           water from the Tel River from Kesinga leaving only 13 lakh liters against the basic requirement Of 24 lakh liters of water for drinking  purposes at   Kesinga NAC area. In the Summer the situation get worst as only 6 wards             get water from the Tel River out of 12 wards in Kesinga NAC. Other 3         wards get water from deep bore well whereas the rest 3 are deprived of        water supply this apart the industry has dug deep bore well in route     through the way to Lanjigarh  which is to reduce the ground water level at             Kalahandi days are not far off that people will be deprived up safe drinking water.

Vedanta Alumina has shifted a good number of tribal who have lost their   land, livelihood and habitat to which they were closely attached as the Dongoria and Jharnia kandhas.

Construction of Alumina Project will destroy the deep reserve forest of Lanjigarh area as well as the Canopy Cover of the forest leading to           environmental degradation and increase in global warming.

The recent Acid rain in the district and the periphery is the outcome of Alumina plant at Lanjigarh.

  • The roads and communication facilities have been badly affected owing to plying of heavy loaded Trucks from and to the plant.
  • Alumina refinery is a highly capita intensive industry. Thus it will not generate much of the employment opportunities as it was observed by 2001-2002 Economic Survey.
  • The Niyamgiri hills is a store house of 400 and more types of herbal plants which are so height sensitive that, they can of be transplanted else where.  Mining will destroy these valuable plants for all time to come.
  • The flora and fauna of the hills will be destroyed as the hills houses a rare   varieties of animals, reptiles etc.
  • Mining will lead to great deal of soil erosion and degradation of rich soil of the locality.
  • Construction of Alumina plant by an MNC has reduced the scope of industrialisation by the state as the benefit goes to the MNC abroad and the state gets but a limited amount.
  • Niyamgiri hills is a strong base for tribal Economy as on the slope of the     hills tribals cultivate Pineapple, Jack fruit, Orange, Mango, Banana etc. Mining will end these practices since the water sources get dried up.


An industry should be established at a place only when these three condition are fulfilled:

  • Whether the industry is environmental friendly.
  • Whether it will provide adequate employment opportunity for the locality.
  • Whether the industry will make use of the locally available raw materials    for the benefit of the local people.

Statistics show that the per capital consumption of Aluminium in India is only 500 grams as against 50-60 Kilogram in USA or European Countries.          NALCO alone is capable of providing the need for the whole country. Thus there is no need for a mining at Niyamgiri hills which will benefit the developed countries not India or Orissa to that effect.

Kalahandi has greater prospects for industrialisation in the following areas:

  • It has greater potentiality in wood craft as the best quality of wood craft is undergoing at Khairpadar.
  • Being a Cotton belt of the state it has a greater potentiality for textiles industry.
  • A fruit processing, canning Unit is highly viable for the district.
  • Since there is a vast deposits of gems in the district, a gem cutting unit can be of help in the district.
  • Massive plantation, Horticulture in the district can lead to canning activities in the locality.
  • Rural Industrialisation can be of great help for the generation of      employment opportunity in the district.
  • Agro and Agro based Industries is of an urgent need for the locality baring  a few Rice Mills, bran oil Mills is of great potentiality for the district.
  • Ayurvedic Medicine unit can also be set up for the benefit of the health and hygiene of the locality.
  • Handloom and Handicrafts, fishery Animal husbandry development has a vast scope in the district.
  • Eco-tourism, tourism has a vast scope in the district which can be taken up with the ancillary units to be opened as hotel, travel units be benefited.
  • Those industries be selected as those which can be sustainable, labour intensive and environment friendly.

Keeping in view the problems and prospective of industrialization in the district of Kalahandi and in a situation of COVID 19 pandemic situation and with the reverse migration of a good number of people a blue-print for the district or to that effect the whole state can be prepared at per with the availability of natural resources of the state to have sustainability. There is an urgent need to go for the Ageo based industries as well as soma processing units for NTFP be set up with a hope to provide large scale employment opportunity for the masses. At the end it can be concluded that the whole world is burning now with the South Pole is meeting. Most developed countries are attracted towards simple living principle of Mahatma Gandhi. Even the people of USA have given up their ties and are with casuals and preferring to have a pollution free environment and living. Then why can not we adopt such a principle and live happily in the world called, “Ram Rajya”

(The views expressed are the writer’s own.)

Simanchal Mishra

Head ,Department of Economics

P I Degree College, Junagarh, Kalahandi, Odisha

E-mail : [email protected]


Subasis Mishra

Assistant Professor

Gandhi Institute for Technology, Bhubaneswar

E-mail : [email protected]

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