Extraction of mineral resources and regional development outcomes: Empirical evidence from Odisha, India

Abstract

Conventional economic argument suggests that higher economic growth and development is positively associated with increasing stock of natural assets of a country and/or region. However, empirical evidences suggest that the relationship between natural resource abundance and economic growth can be either detrimental, beneficial or both, depending on the time period of analysis and the variables used. The objective of this paper is to examine the relation between mineral resource extraction and various socio-economic development indicators in Odisha, India. The analysis was carried out using descriptive statistics, ANOVA and OLS. The results reveal that the relationship between mineral resource dependence and various development indicators is mixed. Districts that are more dependent on minerals have experienced higher percapita income, reduction of both rural poverty and infant mortality rate. However, in terms of other development indicators such as presence of communication facilities and nutritional status of children, mining-districts have lagged behind. In order to overcome these problems large scale investment in education, health and good governance is necessary. In particular, effort must be made to improve the living conditions of indigenous communities residing in mining districts through targeted programs, especially in the areas of health, education, sanitation, and food security.