Making FDI Work in Odisha?

Abstract

Government participation in the emergence of an industry can be explained politically by the existence of masses that were mobilised without effective employment having been created to absorb them. This caused a dangerous situation for those who held power. This chapter discusses how the state of Odisha has garnered a low level of FDI inflows by paying attention to the social conflicts between the supporters and opponents of large-scale investments at the village level. Data collected from two locations in the field where Pohang Iron and Steel Company (POSCO hereafter) and Tata Steel Limited (TATA hereafter) embarked on their investment projects strongly support the argument underlined in the preceding chapter – that the exclusionary nature of state–society relations has blocked large-scale investments to Odisha. As discussed in detail in the preceding chapter, citizens who have been provoked by the dearth of citizenship politics especially in the marginalised groups of the society have opposed the state-led industrialisation. The central argument in this chapter points to the weak relationship between the state and capital, which seems to be recently evolving towards a close tie, and the divided citizens of society in Odisha that have hindered the state-led industrial development. This chapter aims to understand the weak tie between the state and capital in Odisha in bargaining with protesters against large-scale investment projects. For this, it pays attention to the relations between the state, society, and capital, particularly in the process of land acquisition for industrial development. It examines two investment projects embarked on the manufacturing sector in two different districts of Odisha. One is POSCO's steel plant project undertaken in the district of Jagatsinghpur, and the other one is TATA's steel plant project placed in the district of Jajpur (Map 6.1). Data were collected through a short visit to Odisha in February 2012, a four-month stay in Odisha and Delhi from September to December 2012, and another two-week brief visit to Odisha in December 2015. Intensive interviews were conducted with political leaders, bureaucrats, activists, villagers, India's domestic investors, and foreign investors through several visits to POSCO's FDI project site and TATA's manufacturing plant.