There's a corridor in Odisha called the KBK Corridor. (Kalahandi-Balangir-Koraput Corridor). Once upon a time, this area was called the Starvation Corridor. It was a rural and tribal-dominated area where there was a lot of poverty. But today, the situation in that area is very different. In 2020, a state government report showed that there is a food surplus there. If you look at the history of Odisha, you will find many such stories. In 1999, Odisha was the poorest state in our country, where 47% of the population was poor. Imagine that half the population of a state is poor. The state government was so poor that it couldn't even pay salaries to its employees. As a result, the state government had to take a loan. The situation was so bad that in 1998, the RBI refused to give any loan to the state government. But then, something changed. Between 2002 and 2022, the growth rate of Odisha was higher than the national average. Literacy rate and education indicators also improved. Many people credit this to a man, Naveen Patnaik But what did the Odisha government do to make us see this change?
Why was Odisha poor?
To understand this story, we first need to understand how Odisha became so poor. For this, we need to go back to the history of Odisha.
One reason why Odisha was so poor was that many people wanted to take control of Odisha. Be it the Nawabs of Bengal, Mughals, Marathas, or British. Mukundadeva of the Chalukya dynasty was the last Hindu king of Odisha. But he did two things that angered Sulaiman Karrani.
Who was Sulaiman Karrani?
The emperor of Bengal.
First, Mukundadeva gave protection to Sulaiman's enemy, Ibrahim Sur. Second, he formed an alliance with Sulaiman's enemy, Emperor Akbar. After this, the Bengali army invaded Mukundadeva's empire. Mukundadeva was killed in 1568 by a traitor, Ramachandra Bhanja. There was a general in Sulaiman's army, Kala Pahad. He is a prominent figure in Odisha's history. But not for good reasons. When the Bengali army invaded Odisha, Kala Pahad destroyed many temples. When the Afghani-Bengal army took control of Odisha, the independence of medieval Odisha ended. After this, there were many local rulers in Odisha, but they were controlled by someone else. This meant that they were like puppets. In the 16th century, King Akbar defeated the Daud Karrani. And the Mughal rule started in Odisha.
According to Dr. Manas Kumar Das, apart from Akbar, during the reign of other Mughal sultans, there was chaos and confusion in Odisha. Moreover, several temples were destroyed. It's said that the role of a governor was changed so many times that the government couldn't run properly. Since Odisha was close to the Bay of Bengal, it was a hub of export, especially of grains and clothes.
For example, in 1663, East India Company got permission from a Nawab to set up two British factories. One was in Jagatsinghpur, Bengal. And the other was in Balasore, Odisha. But this export trade started to have a deep impact. When the Mughal rule started to weaken, Odisha was taken over by the Nizams of Bengal in the 18th century. Then came the Marathas. Raghuji Bhonsle of Nagpur took over Odisha in the 18th century. During the Maratha rule, religious freedom improved in Odisha. In fact, in his kingdom, many people came to the temples of Puri
from all over the country. But during this rule, the economy struggled. Bhavani Charan Ray wrote in 1956 that the Maratha invasion had a negative impact on the trade of clothes. Binod S Das wrote in his research that during this rule, the poverty of Odisha also increased. At this time, the British had also built factories near the Calcutta port, which reduced the importance of Odisha. Then came the turn of the British. Because Odisha was between Bengal and Madras territories, the British wanted to capture it for their control. And they did so in the 19th century.
Because of this political tyranny, Odisha suffered. All these research papers are linked in the description.
If you want more details, you can read them. The continuous fight for Odisha resulted in the fact that
the Odia-speaking areas could never unite.
For example, in 1817, there was a Paika rebellion in the
Ghurda area of Odisha which weakened the British's control. After the rebellion, the British realised that
they needed to weaken the unity of Odia-speaking areas. For this reason, they placed the coastal area of the state in the Bengal Presidency, the western in the Central Provinces, and the southern area in the Madras Presidency. So, the Odia population became a minority in these three provinces. Because these Odia-speaking regions were a part of a large province, they never got priority.
For example, in the 19th century, the British appointed 8 teachers in Balasore. But 6 of them were Bengali, and only 2 were Odia. If the school teachers couldn't speak the local language of the children, how much would they teach? During the British rule, many experts blamed the geography of Odisha for its poverty. For example, many cyclones hit the coastline of Odisha. For example, on 31st October 1831, a huge cyclone destroyed many salt manufacturers in Odisha.
In 1866, there was a famine in Odisha that killed 27% of the population. But geography wasn't responsible for everything. Many Indian researchers have shown that the attitude of the government was also responsible. For example, the first thing was that there was no harvest, yet the British started to export goods. Between 1855 and 1864, the export of rice increased by more than 500%. Odisha's rice was sent to Madras. Even a French company was selling Odisha's rice.
The second thing was hoarding. The commissioner of the Odisha division said that the landowners of villages hoarded rice during the famine and didn't sell it at any price.
The third thing was that the British government was extremely capitalist. They believed that there should be no intervention in the market. So when there was a shortage of food, the government didn't allow any imports and didn't stop exports. They didn't pay much attention to education and health. Puri School was established in 1835 and the same trend followed in the upcoming years. But Binod S. Das said that these things were like a show. If we talk about health, Binod said that in the 1860s, there were so many diseases that many areas were completely empty. Odisha came to the British government's focus when thousands of people died from the famine. There was the Paika Rebellion against the British in Odisha. But law and order wasn't a big problem for the British. In 1882, W. W. Hunger wrote that there was a very low probability of crime in Odias. Law and order wasn't a problem but the economy wasn't given much importance. Other than Balasore, Bhadrak, and Cuttack, no other new cities were built. Nor was textile production increased, for which Odisha was once very famous.
In 1936, the British made Odisha a separate province. But there was so much poverty that the government had a lot of financial burden. To solve this, the province had to ask for the British government's help. The government of India gave them 4.5 lakh rupees. But it didn't help much. The problem was that there wasn't much revenue in Odisha. They had to spend a lot of money due to poverty. To save money, the government had to cut salaries to reduce their expenses. The revenue in Odisha increased during World War II. But compared to other provinces, it wasn't a significant increase. The problem was that the more developed provinces were given more money. And the poor provinces got very little. So, the poverty in Odisha never ended. Even after independence, this was the problem.
In 1948 and 1949, 24 small princely states were added to Odisha. The territory of Odisha widened and the population increased by 1.5 times. These princely states were also underdeveloped and social spending was very low. So several underdeveloped territories were added to Odisha. But Odisha didn't have enough financial resources. This was the situation till the 1990s.
In the 1990s and 2000s, the debt-to-GSDP ratio of Odisha was much higher than that of other states. According to former civil servant, Dr. U. Sarat Chandran, the situation was so bad in the 2000s that all government resources were spent on salary, pension and interest liability. Other governments had to borrow money to build roads or hospitals. Odisha had to borrow money to pay its salaries. Research showed that the situation was so bad that to invest Rs. 100, Odisha had to borrow Rs. 424. So, it shouldn't be surprising that many of us only know Odisha for its poverty.
How Odisha changed its finance
Phanas Punji was from the Kalahandi district. In 1985, she had to sell her 2-year-old sister-in-law for Rs. 40 so that she could buy rice. Kapil Narayan Tiwari, who was an MLA, said that in this area, children are cheaper than peas. This incident shook the entire nation. In 1985, Rajiv Gandhi visited the region. But the situation didn't change. In an interview, Phanas Punji said that she had become poorer after Rajiv Gandhi's visit. Many officials have her a saree worth Rs. 7 and 8 kg of grains. But 20 years later, when the reporters returned, Phanas Punji's story was different. She was well-dressed and had gold jewellery. Phanas Punji's story is the story of Odisha.
In the past 19 years, Odisha's growth rate has been higher than the national average. From 2015 to 2019, Odisha was one of the 5 states where the decline in poverty was greatest. There's a major reason behind this. There was a time when the Odisha government didn't have enough money. Today, the situation is different.
Graph 11.37
In this graph, on the x-axis, you can see the debt-to-GDP ratio of each state. You can see that only 3 states have a ratio lower than 20%. These are Odisha, Gujarat, and Maharashtra. Out of these three states, Odisha has the lowest debt. This is the major reason why Odisha has improved so much under Naveen Patnaik.
Reason for change
After 1999, Odisha introduced several fiscal reforms. One of them was to privatize power. Today, many states have heavy debts due to their power distribution companies. These are government-owned companies that have so much debt that the government has to bear.
For example, Tamil Nadu's Distribution Company, DISCOM is one of the most loss-making distribution utilities in India. Between 2016 and 2020, the total loss was Rs. 50,000 crores. This was the situation of the Odisha State Electricity Board. In fact, this board received the most subsidies from all public sector companies. In the 1990s, the government decided to privatize it. Odisha became the first state to have its electricity distribution restructured. This privatization was not a complete success. We'll talk about this later.
But because of this, Odisha's debt in terms of utility was one of the lowest in the country. After that, there was a big problem that Odisha was spending a lot of money on salaries. For example, in the 1980s and 90s, Odisha's State Electricity Board's number of employees per units of energy was 6.2, while the national average was 4.5. After this, Odisha's government decided to stop these appointments. Many government posts were removed, and many vacancies were not filled. In fact, the government removed about 45,000 vacant posts. At one time government salaries were 98% of Odisha's income. Apart from expenses, Odisha's government put pressure on revenue as well. For example, they introduced many new taxes like Entry Tax, Profession Tax, and Forest Development Tax. In addition, the government used Odisha's mineral wealth to boost its industries and increase its revenue.
But a major reason for Odisha's poverty elevation was Naveen Patnaik's welfare schemes.
"I will continue to support him till I die."
This is what Usha had to say about Naveen Patnaik. She is the head of a women's self-help group, which was a big initiative of Naveen Patnaik.
In 2001, he launched the Mission Shakti program,
which has created more than 600,000 women's groups with more than 70 lakh members. The objective of these groups is to provide financial and technical support to women so that they can start their own business. Usha said that her husband was busy with religious matters and had to take care of the house.
But the self-help group helped her create an identity,
with which she could help others. Many researchers have shown the benefits of this scheme.
A recent study conducted in Koraput, Odisha, showed that under the scheme, the average monthly income of women has increased from Rs. 13,000 to Rs. 17,000. The Naveen Patnaik government has reduced poverty by distributing grains among the poor.
In 2000, when Naveen Patnaik became the chief minister, there was a major incident in the Kashipur of Raigarh district. 20 people were killed because they were eating mango kernel. After this negative publicity,
the government decided to give 16 kg of rice per month to every poor at a subsidized rate. This reduced hunger and privation in the state. In 2008, the government launched a scheme under which it sold 1 kg of rice for Rs. 2. In 2013, the price was reduced to Rs. 1. The credit for all these schemes was not only given to the politicians, but to the IAS officers as well. A bureaucrat in Odisha said that it is a golden opportunity for bureaucracy. They can work without any political pressure. Naveen Patnaik made the system of transferring and posting officers completely transparent and online. Because of bureaucracy, Odisha changed its disaster relief management model.
In 1999, when a super cyclone hit Odisha,
around 10,000 people were killed. After this, the government launched a disaster risk reduction system.
After this, in 2013, when a huge cyclone hit Odisha, the government evacuated 10 lakh people and only 21 people lost their lives. This doesn't mean that Odisha has solved all the problems. Along with the old problems, new problems have also been created.
Problems Today
A common criticism that Naveen Patnaik's government receives is that Odisha has now become an IAS state. In July, 20,000 people were waiting in Deogarh, Odisha. Only 12,000 people could fit in the venue. But 20,000 people gathered to see a man.
Who was this man?
Naveen Patnaik? No, his private secretary and IAS officer, V. K. Pandian.
You may not have heard of him, but many see him as the face of the Odisha government. Some call him Bossman, while others throw eggs at his car. His videos get more than 1 million views on YouTube. And he has got 1 million followers on Instagram. After the 2019 elections, Pandian is seen in many political rallies of the Chief Minister, where he announces many packages and takes pictures with voters. Along with voters, he is also seen in government posters with Naveen Patnaik. Odisha has a famous governance model -- 5Ts, Teamwork, Technology, Transparency, Transformation, and Time. It is believed that Pandian is leading this. In the Chief Minister's office, a source told The Print that many ministers have now become puppets of the IAS officers. Earlier, Pandian only went to meetings with the Chief Minister. Now, he heads the meetings himself. For instance, when Amit Shah visited Odisha, he was welcomed by Pandian. Some people say that this has made the government more efficient. Others believe that this is not democratic. Because the IAS officers were not elected, but MLAs were. An MLA said that bureaucrats should not do politics. It is their responsibility to help ministers, not to become ministers. Many believe that Pandian wants to step into politics. As Naveen Patnaik's health is weakening, he will fill the leadership vacuum. This may be true. This may be a sign of the beginning of Pandian's political career. Apart from this, the government's finances are in a good position. One reason is that the government has reduced its expenditure on social spending. Social services as a percentage of gross state-domestic product has reduced for many years. An audit report showed that public spending has reduced on education, health, nutrition, and welfare. Odisha's situation has improved. But poverty has not been eradicated completely so that we can reduce social spending. Lastly, we should not forget that Odisha has spatial inequality. Progress has been made, but coastal Odisha has benefitted the most not the northern or southern Odisha. Between 2004 and 2011, poverty fell the most in coastal Odisha.
There are two reasons for this.
The service sector is found mostly in coastal Odisha where the big cities of Odisha are located.
The mining sector is located in other parts of Odisha but it benefits coastal Odisha.
It's primarily due to corruption. Research has shown that the districts where the population of Scheduled Tribes and Scheduled castes is high, poverty is also high. The distribution companies that were privatized have reduced the government's debt but some problems still remain.
In March 2015, the Odisha government cancelled three
private licenses for the power sector. Because the balance sheets of these companies were in heavy loss. The committee report showed that the power sector's situation has worsened compared to the public sector. Consumers' services haven't improved, collection efficiency is bad, and theft is common. Despite these problems, more discom companies were privatized in 2020. This shows us that privatization won't solve all the problems. Odisha witnessed significant change under Naveen Patnaik's leadership. 20 years ago, Odisha was known for its poverty. But today, many people know Odisha for its tourism potential
and hockey madness. Naveen Patnaik has supported many Indian athletes. Odisha's economic transformation story is one of the biggest stories of our country. But the best part is that Naveen Patnaik has shown that politics can be won through secularism. In 2008, Odisha was hit by religious violence. At that time, Naveen Patnaik had promised that every drop of his blood would be secular. He has spent crores of rupees on the transformation of the Puri Jagannath Mandir. Along with that, he has supported many minorities in the state. An MP from his party said that he became the first chief minister to meet Pope Francis. He visited the Sheikh Zayed Grand Mosque in Abu Dhabi. He also attended the entire Rath Yatra. Every bone in his body is secular.