Development as political contestation: the POSCO case and left vs right

Detail

1. The opening case: iron ore in Odisha

• The resource: Odisha (then called Orissa) has some of India's largest untapped iron-ore reserves. Untapped means the ore is still in the ground and has not been mined.
• The state's plan: world demand for steel was rising. So the state signed MoUs with both international and Indian steel makers. An MoU (memorandum of understanding) is a written agreement of intent. It is not yet a binding contract.

• The state hoped for capital (investment money) and jobs.

• The catch: the ore lies in underdeveloped, mainly tribal districts.

• Three groups, three fears:

Group	What it feared
Tribal people (Adivasis)	Displacement (being forced out of their homes) and the loss of land, forest and livelihood
Environmentalists	Mining and steel plants would pollute the air, water and forests
Central government	Stopping the project would set a bad example and discourage investment, including foreign investment

• The protest (The Hindu, 23 June 2006):
• Villagers from the Dhinkia, Nuagaon and Gadakujanga gram panchayats in Jagatsinghpur district protested outside POSCO-India's office in Bhubaneswar.
• They demanded that the MoU be cancelled.
• The protest was organised by the Rashtriya Yuva Sangathan and the Nabanirman Samiti.

2. The POSCO project: key facts

• The MoU: in June 2005, POSCO of the Republic of Korea signed an MoU with the Government of Orissa [6].
• It was for a 12 million tonne integrated steel plant. An integrated plant makes steel from raw iron ore at one site [6].
• The proposed cost was Rs 51,000 crore, and the MoU was valid for five years [6].

• At the time it was among the largest FDI proposals in India. FDI (foreign direct investment) means a foreign company putting money directly into a business in India.

• Why it stalled: three problems kept coming back.

• Land acquisition: villagers would not give up their land.
• Forest clearance: forest land cannot be used for other purposes without the Centre's approval under the Forest (Conservation) Act, 1980 [7].

• Forest Rights Act claims: villagers said they held legal rights over the forest land.

• The end: POSCO later pulled out of the project in the 2010s, and the plant was never built.

3. NCERT's argument: development is a political choice

• What the decision weighs: a project like this sets
• one social group against another (tribals against industry and city consumers), and

• the present generation against future generations (ore and forests used up now are lost to people later).

• Who should decide:

• Experts on mining, the environment and economics should advise.

• The final decision must be political. It should be taken by elected representatives who are in touch with the people.

• Why "development" causes conflict: the word means different things to different people.

• To an industrialist, it means profit and growth.
• To an urban steel consumer, it means cheap and plentiful steel.
• To an Adivasi, it can mean losing a home, a forest and a way of life.
• So development always creates conflict. That is why NCERT treats development as political history, not only as economics.

4. Where everyone agreed, and where they fought

• Agreed (the consensus after 1947):
• Development should mean growth with social and economic justice.

• The government must play a key role in development.

• Disputed: 1. Should there be a central planning institution? (This became the Planning Commission in 1950.) 2. Should the state itself run key industries (the public sector)? 3. How much weight should justice get when it conflicts with growth?

5. Legal answers that came later

• Niyamgiri case: Orissa Mining Corporation v. Ministry of Environment & Forests (2013)
• Background: this was a bauxite mining project in the Niyamgiri hills of Odisha, linked to a refinery funded by Vedanta Resources, a UK-based company [2].
• Earlier, in 2010: the Ministry of Environment and Forests (MoEF) had already refused forest clearance for the project because it broke several laws [7].
• Habitat concerns: the Supreme Court's Central Empowered Committee objected to the project. It said the hills were a vital wildlife habitat and elephant corridor and the home of the Dongria Kondh tribe [2].
• What the Supreme Court held:
  • The gram sabha is the authority that decides the nature and extent of the tribals' individual and community rights under the Forest Rights Act [2].
  • This includes their religious rights. The gram sabhas had to judge whether mining would harm the hill revered as the home of their deity, Niyam Raja [2].
• Result: the Court let the gram sabhas decide, and they rejected bauxite mining.

• Lesson: the "political decision" NCERT speaks of was handed down to the village assembly.

• Forest Rights Act, 2006 (FRA): its full name is the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.

• Purpose: it legally recognises the forest rights of tribals and other forest dwellers who lived in forests for generations but whose rights were never recorded [3].
• Rights it recognises: living on and farming forest land, ownership of minor forest produce, community rights, habitat rights of primitive tribal groups, and the right to protect and manage community forest resources [3].
  • Minor forest produce means things like honey, tendu leaves and bamboo, but not timber.
• The gram sabha's role: the gram sabha starts the process of deciding these rights [3].
  • It receives claims, checks them and maps the land claimed [3].
  • A gram sabha is the assembly of all adult members of a village, with full participation of women [3].

• Protection from eviction: no forest dweller can be evicted until the process of recognising and checking their rights is complete [3].

• PESA, 1996: the Panchayats (Extension to Scheduled Areas) Act, 1996 covers Scheduled Areas, the tribal areas listed under the Fifth Schedule of the Constitution.

• Before land is acquired there for development projects, the gram sabha must be consulted [7].

• RFCTLARR Act, 2013: its full name is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

• What it replaced: the colonial Land Acquisition Act, 1894 [4].
• When it passed: Lok Sabha on 29 August 2013, Rajya Sabha on 4 September 2013, and Lok Sabha again on 5 September 2013 [4].
• Aim: a humane, participative and transparent acquisition process, carried out in consultation with panchayats and gram sabhas [5].
• Steps of acquisition, in order: [4]

Step	What happens
1	Social Impact Assessment (SIA): a study of whether the project's benefits outweigh its social costs [5]
2	Consent of affected families, collected along with the SIA [5]
3	Preliminary notification: the government announces it intends to acquire the land
4	Declaration of acquisition
5	Compensation paid within a fixed time, plus rehabilitation and resettlement for affected families [5]

• Consent needed: [5][4]

Project type	Prior consent of affected families
Private company	at least 80%
Public–private partnership (PPP)	at least 70%
Public sector undertaking (government company)	not required

• Compensation: up to four times the market value in rural areas and twice the market value in urban areas [4].

• Later change: in 2015, the Centre issued an amendment ordinance to change the Act [8]. An ordinance is a temporary law made by the President when Parliament is not sitting.

• Similar contests elsewhere:

• the Narmada dams (the Narmada Bachao Andolan against displacement);
• Singur and Nandigram in West Bengal (2006–07), where land was taken for a car factory and a chemical hub.

6. Left and right (NCERT box)

• Where the terms apply: "left" and "right" describe a party's position on social change and on state-led redistribution. Redistribution means the state moving wealth from the rich to the poor.
• Left:
• prefers state control and regulation of the economy to free competition;
• stands for the poor and backward classes;

• supports government policies that help them.

• Right:

• believes free competition and market economies ensure progress;

• thinks the government should not interfere in the economy unless it is necessary.

• NCERT's question: which parties were left and which were right in the 1960s, and where did the Congress stand?

Position	Parties in the 1960s
Right	Swatantra Party (formed 1959; pro-market, against the Nagpur resolution on cooperative farming); Bharatiya Jana Sangh on economic issues
Left	CPI, CPI(M) (formed in 1964 after the CPI split), the Socialists
Centre / left of centre	Indian National Congress, a broad coalition that held both pro-market and pro-state groups

• Why this matters: because the Congress sat in the centre, it could absorb views from both sides. This helped it stay in power and is one root of one-party dominance (the Congress winning election after election).

Prelims Hooks

• The POSCO protests (The Hindu, 23 June 2006) were in Jagatsinghpur district, Odisha, by villagers of Dhinkia, Nuagaon and Gadakujanga.
• The POSCO–Orissa MoU was signed in June 2005 for a 12 million tonne steel plant at a proposed cost of Rs 51,000 crore.
• Orissa Mining Corporation v. MoEF (2013) involved bauxite mining in the Niyamgiri hills. The Court made the gram sabha the authority to decide forest and religious rights under the FRA 2006.
• Under the FRA 2006, the gram sabha (not the Collector) starts the process of recognising forest rights.
• Under the RFCTLARR Act 2013, private projects need 80% consent, PPP projects need 70%, and PSU projects need no consent. The Act replaced the Land Acquisition Act, 1894.
• Under the RFCTLARR Act 2013, compensation is up to 4× the market value in rural areas and 2× in urban areas.
• PESA 1996 requires consulting the gram sabha before land is acquired in Fifth Schedule areas.
• Trap: in the 1960s, the Swatantra Party was on the right, not the left. The Congress was at the centre or left of centre.

Mains Points

• Who decides development (GS-II): NCERT says experts advise but elected representatives decide.
• Niyamgiri (2013), the FRA's gram sabha and PESA push the decision further down, to the affected community.

• This deepens democracy but can slow projects. A good answer weighs consent against national needs such as steel and minerals.

• Growth against justice (GS-I/III): the POSCO case shows today's investment and jobs set against tribal livelihoods and future generations' resources.

• The RFCTLARR Act's SIA and consent rules turn this trade-off into a legal process.

• The 2015 ordinance shows that the trade-off is still disputed.

• The left–right debate after 1947 (GS-I): all sides agreed on the goal of growth with justice.

• They disagreed about the means: a central planning body, the public sector, and markets.

• The Swatantra Party against the CPI, with the Congress in the centre, explains both the model of the Second Plan and the Congress's dominance.

• Reform ideas: apply the FRA properly before forest clearance; make the SIA independent; share benefits with locals (for example, district mineral funds); give people a real voice through the gram sabha instead of token consultation.