1415435177Debi Prasad Bagchi, former chief secretary of Odisha government, was in news when the Central Empowerment Committee (CEC) in its recent report to the Supreme court on the state mining scam endorsed his noting in April, 2002 that the transfer of mine owned by Sarda to the Jindals would amount to a fraud.

Bagchi, an economist by education and now a Development Consultant, did not buckle under pressure from the powerful mining companies and the powers that be and took a stand which has been vindicated by the CEC.

In an interview with Nageshwar Patnaik, the suave retired bureaucrat addressed the issues ranging from the mining scam to the development of the Odisha and India.

Excerpts from the Interview:

The Central Empowerment Committee (CEC) report has endorsed your noting dated April 13, 2002,“It is well known that the mine is being operated by the Jindals.  Would this not amount to a fraud?” What was the basis of your noting?

I do not recall what I wrote and in what context. It appears to be an internal query and not a policy advice.

Do you think the transfer of the mining lease from Sharada to Jindal group was illegal?

I am not aware of this matter.

Shah Commission has stated in its report that the mining scam in Odisha is more than Rs 60,000 crore and it has recommended a CBI inquiry to further unearth the scam. Do you endorse the Shah Commission’s recommendation for a CBI inquiry?

I have not seen the report of the Shah Commission and hence cannot comment. The matter is before the Supreme Court, whose verdict should be awaited.

The Central Empowerment Committee (CEC) report stated that bad governance is responsible for the mining scam in Odisha. Why is the Governance so weak in Odisha?

The mining department is under-staffed. Modern technology needs to be introduced in assessing the quantities of ore mined and transported. All willful transgressions of law have to be strictly dealt with.

The mining scam has stalled the mining operations bringing down revenues to the state coffer substantially.  What are the alternative sources for the state government to mop up revenues to compensate the revenue loss in the mining sector?

The mining industry needs to be put back on the rails without any further delay. Both the central and the state governments need to sit together and find solutions. Mining royalty is a very important source of revenue for the state.

Introduction of GST will bolster the revenues of the states. The sooner it happens, the better.

Sales tax rates are quite high in Odisha. There is not much scope to revise the rates upwards. Electricity duty, water rate, educational fees, user charges etc. can be reviewed.

PSUs need to be privatized in varying degrees.

The state needs to look at the huge subsidy burden it has undertaken. There should at least be some inflation-indexing.

The mining scam in Odisha, Karnatak, Goa and other places has badly hit the national economy. What should the union and state governments do to ensure the smooth operations of the mining sector?

They should come up with policies forthwith which are transparent, non-discretionary and non-discriminatory.

What should be the National Mining Policy?

The Policy should discourage fly-by-night operators and to introduce serious players. It is a pity that internationally known miners do not operate in India. Underground mining needs to be tried seriously where environmental issues are concerned. Rent-seeking should be replaced by optimum development of mines with environmental sustainability.

Do you think the setting up of a separate Trading Exchange for the Mining and Metal will help in a better price discovery?

No, the existing commodity exchanges can do the job. No exchange can determine precisely the value of an individual mine.

Do you think, instead of the MOU route that the Naveen Patnaik government has signed pacts with corporate houses; it should have opted for open bidding route? Which route should the state adopt for holistic development of the state without leakages?

States have been competing with each other for investments. Odisha has no other choice but to go for MOUs, when that was the order of the day. But then in an MOU there are deliverables by both parties.

One can go for the bidding route when all clearances are in place. This approach has been adopted by the Ultra Mega Power Projects [UMPPs], by starting shell companies. Odisha can begin; however, it takes time even through this process.

Resource rich Odisha remains the most backward state going by both the Raghuraman and Rangarajan Committee reports. The last year report of Raghuraman Committee said that Odisha is the most backward state while Rangarajan Committee report this year stated that Odisha is the second poorest state followed by Bihar. Don’t you think politicians and bureaucrats are responsible for the lack of development of Odisha in spite of the state having rich mineral and natural resources? 

Odisha has a large population of landless laborers and marginal farmers. Natural calamities occur with disturbing frequency, disrupting the lives of the poorest. The tax base is poor, although in the recent years, there has been some improvement. The state had got into a debt trap. Only in the last decade, some improvement has been noticed after the introduction of fiscal reforms. These gains can easily get offset by consumption-oriented populist schemes. However, the basic issue is that Odisha should have been treated as a special category state from the beginning. This has not happened. The state not having an international border has been flaunted as an excuse.

What reasons do you attribute for the state’s failure to meet the challenges of economy like the growth of the new economy sectors is slow in the state?

Investment in the IT sector has shown promise. Most of the major players have come to the state. The tremendous potential of the bio-technology sector is yet to be exploited. The state has surplus power. Hence, power-intensive industries, particularly in the metallurgical sector, can come up. However, backward linkages with raw materials need to be ensured. MOUs must ensure first-mile as well as last-mile connectivity.

The growth of the agriculture sector is also in the negative zone in the last one or two years. What are the reasons for this and how to address this problem?

Development of marketing and setting up of cold chains are the priority needs. The state can try the PPP mode. Contract farming needs to be introduced. Odisha has tremendous potential for organic farming. Oil seeds and pulses need to be grown in larger areas in the up-lands. There is tremendous potential for development in horticulture and plantation crops. Value addition within the state needs to be encouraged. Recognition of the rights and obligations of the share croppers needs to be recognized as in the case of operation Barga of West Bengal.

Gujarat is a developed state because of the work culture and dignity of labour in that state. Are these twin factors absent in Odisha?

The common man is hard working, although recently there has been a trend of avoiding work when plenty of cheap rice is available. This is resulting in some agricultural lands lying fallow. The blue collared workers need to work harder. The state has too many holidays. Dignity of labor will come once proper wages are received by those who work hard. This is true of the whole country. From the days of Macaulay the educated Indians have been avoiding manual labor of any sort.

Which are the sectors where jobs can be generated in Odisha? And, what should the state government do for this?


Skill development in all spheres is the need of the hour, including re-skilling of the existing workers. The state should seek active cooperation of the private sector and the leading CPSUs in this. Most of the future employment will come from self-employment and through the MSME sector. Ancillary development by the large scale industries should be made mandatory.

How can the brand image of Odisha be developed outside the state which is conspicuous by its absence?

Brand image comes from consistency and credibility. It requires decades of dedicated effort. Japan is a glaring example; so is Germany.

Any comment you would like to give on the development of Odisha?

Blame game does not lead to growth. A positive mindset needs to replace persecution-mania on everybody’s part. This is true for the whole country. Finding solutions is a better option than doing nothing.

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