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Chapter 2: National Projects, Local Costs

In January 1948, Jawaharlal Nehru visited the villages near Sambalpur that would be swallowed by the Hirakud Dam — India’s first major post-independence river valley project, a statement of intent that the young republic would industrialize its way out of poverty. The villagers, who had been told that their homes, their fields, and the graves of their ancestors would disappear under a reservoir stretching twenty-five kilometres, asked the Prime Minister what would happen to them.

Nehru’s response: “If you are to suffer, you should suffer in the interest of the country.”

That sentence was not an off-the-cuff remark. It was a philosophy. And for seven decades, it has been applied with remarkable consistency to Odisha — a state whose land, water, minerals, and people have been requisitioned for projects that serve the nation while exacting their costs almost exclusively from the local population. The pattern is so regular that it functions less like a series of policy decisions and more like a template: identify a national need, locate the resource in Odisha, build the project, extract the benefit, leave the cost.

This chapter traces that template through three projects that span half a century of independent India: the Hirakud Dam (commissioned 1957), the Rourkela Steel Plant (commissioned 1959), and the National Aluminium Company (established 1981). Each is a “national project” in the precise sense that the nation decided, the nation benefited, and Odisha absorbed the consequences. Together, they reveal a structural relationship between Delhi and Odisha that no change of government — at either end — has fundamentally altered.

Hirakud: The Dam That Drowned a Promise

The Scale

The Hirakud Dam, built across the Mahanadi River near Sambalpur, was completed in 1957 after nearly a decade of construction. At the time, it was the world’s longest dam — a 25.8-kilometre structure including its dykes, spanning the full width of the Mahanadi valley. It was one of the first major multipurpose river valley projects in independent India, a “temple of modern India” in Nehru’s famous phrase. The reservoir created by the dam — the Hirakud Reservoir — submerged 1,83,000 acres of land, including 1,23,000 acres of cultivated land. It swallowed 325 villages: 291 in Odisha and 34 in what was then undivided Madhya Pradesh.

The official purposes were three: flood control for the Mahanadi delta, irrigation for the agricultural heartland, and hydroelectric power generation to fuel industrialization. The dam’s two power stations — at Burla on the right bank and Chiplima, 22 kilometres downstream — have a combined installed capacity of 347.5 MW. The irrigation system was designed to serve the Mahanadi delta’s kharif and rabi crops through an extensive canal network.

On paper, this was development at its most ambitious. On the ground, it was something else.

The Displacement

Approximately 22,000 families — roughly 150,000 people — were displaced by the Hirakud project. These were not marginal populations clinging to unproductive land. Many were established farmers in one of the most fertile valleys in western Odisha — the Mahanadi floodplain, where centuries of silt deposits had created some of the richest agricultural land in the state. The submerged area included thriving villages with markets, schools, temples, and social structures that had evolved over generations.

The promised compensation was budgeted at Rs 95 million. The amount actually disbursed was Rs 33.2 million — barely 35 percent of what was allocated. Let that arithmetic settle. Even by the standards of 1950s India, the gap between what was promised and what was delivered was extraordinary. The government budgeted a compensation amount, presumably based on some calculation of what the displaced families needed, and then paid barely a third of it.

Where did the remaining Rs 61.8 million go? Into the general maw of bureaucratic absorption — underspending, leakages, procedural barriers that prevented families from filing claims, arbitrary reductions in assessed land values, and the simple fact that displaced populations with no political leverage cannot compel a government to honour its own budgets. The Hirakud Budi Anchal Sangram Samiti — the organization of dam oustees — has been fighting for adequate compensation for decades. As of 2025, seven decades after displacement, the fight continues. Many of the original oustees are dead. Their descendants inherited the grievance along with the poverty.

The Water That Never Arrived

Here is where the Hirakud story becomes something more than a familiar tale of displacement and broken promises. It becomes a case study in how a project designed for one purpose gets captured for another.

The dam’s irrigation system was designed to serve agriculture — the farmers of the Mahanadi delta who needed reliable water for their rice crops. And for the initial decades, that is roughly what happened. The canal system irrigated approximately 1.56 lakh hectares of kharif land and 1.09 lakh hectares of rabi land. Sambalpur and the surrounding districts depended on the reservoir for drinking water. The system was not perfect, but it functioned.

Then came industrialization.

In 1990, the Odisha government issued an order allowing industries to draw water from the Hirakud Reservoir. The timing was not coincidental — it coincided with the state’s push to attract industrial investment in the post-liberalization era. What began as a trickle of industrial water allocation became, over the next decade, a torrent. By 2007, industrial water allocation from the dam had increased sixfold compared to pre-1997 levels.

The industries that moved in were precisely the kind that consume enormous quantities of water: aluminium smelters, steel plants, thermal power stations. Hindalco (the Aditya Birla Group’s aluminium arm) set up operations drawing from the reservoir, its captive power plant alone requiring 900 cubic metres per hour. Vedanta Alumina, Bhushan Steel, and a constellation of thermal power plants in the Jharsuguda-Sambalpur industrial corridor all secured water allocations from Hirakud.

The arithmetic of water scarcity is pitiless. A reservoir has a fixed capacity. When industrial offtake increases sixfold, the water available for irrigation decreases. The tail-end farmers — those at the far reaches of the canal system, the last to receive water and the first to lose it when supply diminishes — were the ones who paid. Academic studies documented the phenomenon in precise terms: “Big Dam, Big Failures: A Study of the Canal Irrigation System and Deprived Tail-End Farmers in the Hirakud Command Area” found systematic deprivation of farmers in the lower reaches of the canal system.

In November 2007, the crisis exploded into public view. Approximately 30,000 farmers from eight districts stormed the Hirakud reservoir area in Sambalpur, demanding that the dam’s water be used for its original purpose: agriculture. Over 300,000 farmers across the command area were affected by the diversion. Their complaint was not abstract. They could see the pipelines being laid by industrial corporations. They could see the intake wells being constructed inside the reservoir. They could measure the declining flow in their canals. The water that Nehru had promised would make their agriculture productive was being pumped to make aluminium.

And here is the detail that transforms the story from tragedy to insult: industries in Odisha were getting water from the reservoir at half the price that farmers were charged when sourcing from the same government facilities. The subsidy ran in the wrong direction. The farmers — the people for whom the dam was ostensibly built, the people whose villages were drowned to create the reservoir — were paying more for water than the corporations that arrived forty years later to siphon it off.

The Template

The Hirakud story establishes the template that would be repeated across Odisha for seven decades:

National need identified: Flood control, irrigation, power generation — all legitimate, all beneficial to the nation.
Local population displaced: 150,000 people, with compensation at 35 percent of what was budgeted.
Benefits captured by external interests: The hydroelectric power fed industrial plants. The water was diverted to corporations. The delta irrigation — the one benefit that would have served the local economy — was progressively degraded.
Costs left with locals: The displaced families remained poor. The tail-end farmers lost water. The reservoir’s environmental impact — silting, fishery decline, ecosystem disruption — was borne entirely by the surrounding communities.
No mechanism for accountability: Seventy years later, compensation remains unpaid. The dam oustees’ movement has achieved moral victories but no systemic redress.

In software engineering, there is a concept called “technical debt” — the accumulated cost of shortcuts taken during development that must eventually be paid, with interest. Hirakud created a social debt that has been accumulating interest for seven decades. The displaced families and deprived farmers are the creditors. The Indian state is the debtor. And unlike technical debt, which eventually crashes the system if not addressed, social debt in a democracy can be deferred indefinitely, because the creditors lack the political power to force repayment.

Rourkela: The Enclave That Produces But Does Not Nourish

The Promise of Steel

In 1954, the Government of India decided to build three new public-sector steel plants to expand the nation’s steelmaking capacity as part of the Second Five Year Plan. One would be built with Soviet assistance (Bhilai, in Madhya Pradesh). One with British assistance (Durgapur, in West Bengal). And one with West German assistance — at Rourkela, in Odisha’s Sundargarh district.

The choice of Rourkela was driven by industrial logic: proximity to iron ore deposits in the Keonjhar-Sundargarh belt, access to coal from the Jharsuguda-Ib Valley corridor, availability of water from the Brahmani River, and the Odisha government’s determination to attract industrial investment to one of its most backward tribal districts. Krupp and Demag, two of Germany’s most prestigious industrial firms, formed a joint venture called Indien Gemeinschaft Krupp Demag (IGKD), headquartered in Duisburg, to provide consultancy, design, and commissioning services. Thousands of German technical personnel came to Rourkela — so many that in the late 1950s and early 1960s, the town hosted the largest German colony outside Germany. The Indo-German Club was established for their social life.

The Rourkela Steel Plant was commissioned on 3 February 1959. It was India’s first integrated steel plant built with foreign collaboration in the public sector. The plant’s capacity was progressively expanded, and after a modernization program completed in 2015-16, it reached a crude steel capacity of 4.5 million tonnes per annum.

The Displacement

To build the plant, the township, and the Mandira Dam (which supplied water to the plant), the government acquired approximately 19,772 acres of land from over 32 villages. An additional 11,923 acres were acquired for the Mandira Dam, submerging 31 tribal villages.

The displaced population was overwhelmingly tribal. Scheduled Tribes constituted between 68 and 90 percent of those affected, including Oraon, Munda, Kharia, and Gond communities who had lived in these forested highlands for centuries, sustaining themselves through agriculture, forest produce collection, and community-based resource management. Between 13,000 and 16,000 Adivasi inhabitants were forcibly resettled from the plant area in 1955. Another 8,785 were resettled from the Mandira Dam submergence zone.

The resettlement was, by all accounts, catastrophic. Academic studies documented that 78.7 percent of displaced families lost land entirely. Many experienced what sociologists call “the disintegration of household cohesion” — families that had functioned as integrated economic units for generations, with each member contributing to agriculture, animal husbandry, forest collection, and household production, were atomized into individual wage-seekers. The resettled populations were placed in areas like Jalda, Jhirpani, Bisra, and Bondamunda — peripheral settlements around the new industrial town that bore no resemblance to the forested villages they had lost. Many became seasonal labourers, dependent on the very industrial economy that had displaced them but unable to access its better-paying permanent jobs.

The Enclave Economy

And this brings us to what Rourkela actually became: an enclave.

In FY 2021-22, the Rourkela Steel Plant reported annual revenue of Rs 26,830.57 crore and profit before taxes of Rs 6,347.65 crore. Its parent company, the Steel Authority of India Limited (SAIL), crossed Rs 1,03,473 crore in total revenue that year, with an EBITDA of Rs 22,364 crore. These are numbers that would make any corporation proud.

But consider where those numbers go. SAIL is a Government of India enterprise. Its profits flow to the central exchequer as dividends. Its management is appointed by the central government. Its procurement is controlled centrally — raw materials are sourced through SAIL’s integrated supply chain, with procurement decisions made at the corporate headquarters in New Delhi, not in Rourkela. Its marketing and sales are coordinated nationally. The steel produced in Rourkela is sold across India and exported internationally. The pricing, allocation, and distribution of Rourkela’s output is determined by SAIL’s corporate strategy, which is determined by the Government of India’s industrial policy.

What remains in Odisha? The wages paid to workers (a declining number, as automation increases), the local taxes and royalties (set by central government formulas), and whatever economic activity the presence of a large industrial facility generates in the surrounding area. This is not trivial — Rourkela is a city of over 500,000 people, and the steel plant is its economic anchor. But the relationship between the plant and the region is that of an extraction point, not an ecosystem.

The concept of an “enclave economy” comes from development economics, and it describes precisely what Rourkela represents. An enclave economy is one where a large-scale industrial operation exists within a region but is not organically connected to the region’s broader economy. The supply chain is external. The management is external. The profits flow externally. The local economy provides land, water, some labour, and environmental absorption capacity, and receives in return wages and some tax revenue — a fraction of the value created.

Think of it in terms of a franchise model versus an organic business. An organic business grows from local roots: local entrepreneurs, local supply chains, local reinvestment. The profits circulate within the local economy, creating multiplier effects. A franchise is controlled from outside: the brand, the supply chain, the profit model, and the strategic decisions are all external. The local economy provides a location and some staff. The value flows to headquarters.

Rourkela Steel Plant is a franchise of the Government of India, located in Odisha. The iron ore comes from mines controlled by SAIL or allocated through central government mechanisms. The coal comes through centrally managed allocations. The technology decisions are made in Delhi. The capital investment decisions are made in Delhi. The steel is distributed through a national network controlled from Delhi. Odisha provides the land (taken from tribals), the water (from the Brahmani, via Mandira Dam, which displaced more tribals), and the physical environment that absorbs the pollution.

Rs 26,830 crore in revenue. Rs 6,347 crore in profit. How much of that was reinvested in Sundargarh district? How much funded schools for the descendants of the displaced tribals? How much built hospitals in the villages that provided the land? The question answers itself. The profits went to SAIL’s central balance sheet, and from there to the Government of India, and from there into the general budget, where Odisha’s 3.5 percent population share determined its allocation.

The steel plant is sixty-seven years old. The tribal communities displaced by it have not recovered. A 2022 protest in Rourkela — where a tribal man was killed during demonstrations against rail expansion that threatened further displacement — demonstrated that the pattern established in 1955 has not been broken. The same land, the same people, the same equation: national project, local cost.

NALCO: Mining the Mountain, Dividing the Country

The Setup

The National Aluminium Company Limited (NALCO) was established on 7 January 1981, with its registered office in Bhubaneswar. It was conceived as a public-sector enterprise to exploit India’s bauxite reserves — and specifically, the massive Panchpatmali deposit in Koraput district, in the southern highlands of Odisha.

The numbers establish the context. Odisha holds approximately 51 percent of India’s total bauxite reserves. The Panchpatmali Hills in Koraput contain one of the largest bauxite deposits in the country. NALCO was created to mine this bauxite, process it into alumina at a refinery in Damanjodi (at the foot of the Panchpatmali Hills), and smelt it into aluminium at a facility in Angul, 600 kilometres to the north. The smelter is powered by a 1,200 MW captive power plant, also at Angul, fuelled by coal from captive mines.

The Government of India owns 51.28 percent of NALCO’s paid-up equity capital. This is not a private enterprise operating with a government licence. This is the government itself, extracting bauxite from Odisha’s hills, processing it into aluminium, and selling it at prices determined by the London Metal Exchange — the global aluminium pricing benchmark that reflects supply and demand in London, Shanghai, and New York, not in Koraput.

NALCO’s Panchpatmali bauxite mine is a fully mechanized opencast operation that has been operating since November 1985. The mine has a capacity of 68.25 lakh (6.825 million) tonnes per annum. The alumina refinery at Damanjodi has a normative capacity of 21 lakh (2.1 million) tonnes per annum. The aluminium smelter at Angul produces 4.6 lakh (460,000) tonnes per annum.

The Displacement at Damanjodi

To build the mining and refinery complex, NALCO acquired approximately 2,741 hectares of land, displacing 597 families across 26 villages. Of these, 42.55 percent were tribal families — Kondh, Paraja, and other Scheduled Tribe communities who had inhabited the Eastern Ghats for generations, living in the ecological niche between the bauxite-capped plateau and the forested slopes.

NALCO, to its credit, provided employment to 599 out of 600 land-displaced persons by 2022. This is a better rehabilitation record than most industrial projects in India. But employment in an industrial facility is not the same as the livelihood system that was destroyed. A tribal family that practiced mixed agriculture, collected forest produce, maintained community grazing lands, and participated in a social economy built around seasonal rhythms does not simply transition into industrial wage labour without fundamental disruption to their way of life. The employment replaces income. It does not replace the web of social, cultural, and ecological relationships that constituted the displaced community’s existence.

Where the Money Goes

In FY 2023-24, NALCO recorded a sales turnover of Rs 13,149 crore and a net profit of Rs 2,060 crore. For the full year, the company paid dividends of Rs 918.32 crore — 45 percent of profit after tax.

Now follow the dividend trail. The Government of India owns 51.28 percent of NALCO. When NALCO pays dividends, 51.28 percent goes to the central exchequer. In FY 2024-25, NALCO paid a record Rs 988.88 crore as dividend to the Government of India, with total dividends for the year reaching Rs 1,928.46 crore.

Nearly a thousand crore rupees flowing from Odisha’s bauxite to Delhi’s treasury every year. The bauxite comes from Koraput, one of the poorest districts in India, where rural poverty has historically been measured at 74.2 percent among tribal populations. The aluminium is sold at London Metal Exchange prices to buyers worldwide. The profit is distributed as dividends to shareholders, half of whom — by equity weight — are the Government of India. The Government of India uses this dividend revenue in its general budget, where it is allocated across all states based on population-weighted formulas.

The circularity is the same as with freight equalization, the same as with Hirakud, the same as with Rourkela: the resource is in Odisha, the extraction is in Odisha, the environmental cost is in Odisha, the displacement is in Odisha, and the financial benefit flows to Delhi.

Pottangi: The Pattern Repeats

In June 2024 — seventy-seven years after Nehru told the Hirakud villagers to suffer in the national interest — NALCO executed a new mining lease with the Odisha state government for the Pottangi bauxite deposit near the Serubandha Hills in Koraput district. The lease covers 697.979 hectares. The mine has an estimated reserve of 111 million tonnes and an annual production capacity of 3.5 million tonnes, projecting a mine life of 32 years.

The tribal communities in Semiliguda and Pottangi blocks responded the way tribal communities in Odisha have responded to every such project for half a century: with resistance. Public representatives raised “NALCO Go Back” slogans. In August 2024, when NALCO attempted to conduct a bhumi pujan (foundation ceremony), agitating villagers stalled the event, demanding that issues around settlement of land acquired should be addressed before any project commenced.

The specific complaint — that the mining lease was signed without adequate Gram Sabha approval, as required by the Forest Rights Act and the Supreme Court’s Niyamgiri precedent — strikes at the heart of democratic governance. The Gram Sabha (village assembly) is the constitutional mechanism through which tribal communities exercise their right to consent or refuse consent to projects that affect their land and livelihoods. If a mining lease is signed without genuine Gram Sabha approval, it is not merely a procedural violation. It is a statement that the community’s constitutional right to self-governance is subordinate to the nation’s need for aluminium.

Here is the question that the Pottangi case forces: if the Government of India owns 51.28 percent of NALCO, and NALCO signs a mining lease with a state government that is politically aligned with the central government, and the mining lease is executed without the informed consent of the tribal communities whose land will be mined — who exactly is the state protecting? The tribal community, whose constitutional rights are being overridden? Or the central PSU, whose production targets require new bauxite sources?

I believe the answer is structurally determined rather than a matter of intent. Individual officers and politicians may genuinely care about tribal welfare. But the institutional architecture — where the central government owns the mining company, appoints its management, receives its dividends, and sets the industrial policy within which the company operates — creates a systematic bias toward extraction. This would be wrong if NALCO’s tribal welfare expenditure in Koraput were proportional to its extraction revenue, if the Gram Sabha process were genuinely participatory and binding, or if the central government’s dividend income from NALCO were ring-fenced for development in the mining-affected districts. None of these conditions obtain.

The Common Pattern: An Architecture of Extraction

Step back from the three projects and look at the template they share. It is remarkably consistent across seven decades, three different types of project (dam, steel plant, mining company), and multiple changes of government at both the state and central levels.

Step 1: National Need, Local Resource

The nation needs flood control and power (Hirakud). The nation needs steel (Rourkela). The nation needs aluminium (NALCO). In each case, the resource — water, iron ore, bauxite — happens to be located in Odisha. The project is framed as serving the national interest, which it does. The question of whether the national interest can be served without devastating the local population is never seriously engaged.

Step 2: Land Acquisition from the Powerless

The land is acquired from communities that have the least political power: tribal populations in remote districts with no representation in state capitals or Delhi. The legal mechanisms of land acquisition — the Land Acquisition Act of 1894 (used for Hirakud and Rourkela) or its successor legislation — treat land as a commodity whose value can be computed and compensated. They do not account for the complex livelihood systems, social structures, ecological relationships, and cultural meanings that are destroyed when a community is uprooted.

The compensation is systematically inadequate. At Hirakud, 35 percent of the budgeted amount was actually disbursed. At Rourkela, 78.7 percent of displaced families lost land entirely. At NALCO, employment was provided (an improvement), but the transformation from a forest-based tribal economy to industrial wage labour is a displacement of identity, not just geography.

Step 3: Benefits Flow Upward and Outward

Hirakud’s hydroelectric power feeds industrial plants controlled by national corporations. Rourkela’s steel output is managed by SAIL, a central PSU whose profits flow to Delhi. NALCO’s aluminium is sold at international prices, with dividends flowing to the central exchequer. In each case, the bulk of the economic value created by the project leaves Odisha.

What remains is wages (for those who get jobs), royalties and taxes (at rates set by the central government), and whatever trickle-down effects the presence of a large industrial facility creates. These are real benefits. They are not proportional to the value extracted.

Step 4: Costs Remain Local

Environmental degradation: the reservoir silting, the river pollution from steel production, the landscape destruction from opencast mining. Health impacts: the respiratory diseases in mining areas, the mercury contamination near aluminium plants, the waterborne diseases from disrupted hydrology. Social disruption: the disintegration of tribal communities, the loss of traditional knowledge systems, the creation of “development refugees” who are too displaced to farm and too unskilled to participate meaningfully in the industrial economy.

These costs are borne entirely by the local population. They do not appear on SAIL’s balance sheet. They are not deducted from NALCO’s dividend before it is sent to Delhi. They are externalities in the precise economic sense — costs generated by the production process but paid by parties who did not consent to the transaction.

Step 5: No Structural Accountability

The displaced communities have no effective mechanism to hold the central government accountable for the costs imposed on them. Legal remedies are slow, expensive, and systematically biased toward state and corporate interests. Political representation is negligible — 21 Lok Sabha seats, with the most affected tribal districts represented by MPs who are minor figures in national politics. Media attention is episodic — a protest makes headlines for a day, then the news cycle moves on.

The result is that the extraction can continue indefinitely. Each generation of projects — the dams of the 1950s, the steel plants of the 1960s, the mines of the 1980s, the power plants of the 2000s, the new mining leases of the 2020s — operates the same template. The justification changes (nation-building, liberalization, Make in India, Atmanirbhar Bharat), but the structural relationship does not.

The Accounting of National Projects

Let me try to construct, imperfectly and with acknowledged uncertainty, a rough balance sheet for what these national projects have meant for Odisha.

On the credit side:

Employment: tens of thousands of direct jobs at Rourkela, NALCO, and dam-related operations, plus indirect employment in surrounding service economies.
Infrastructure: roads, railways, townships, and power supply that would not exist without these projects.
Tax revenue: royalties, GST, and corporate taxes that contribute to state finances (though at rates set by Delhi, not Bhubaneswar).
Urbanization: Rourkela and Angul are cities that exist because of these projects.

These are real benefits. Denying them would be intellectually dishonest.

On the debit side:

Displacement: conservatively 200,000 people across the three projects, with systematically inadequate compensation and rehabilitation.
Environmental destruction: 1,83,000 acres submerged at Hirakud, 19,772 acres acquired at Rourkela, ongoing landscape destruction at NALCO’s mining sites.
Water diversion: Hirakud’s irrigation function progressively cannibalized by industrial demand.
Revenue leakage: the majority of profits from Rourkela and NALCO flowing to Delhi as dividends on central government equity.
Opportunity cost: the industrial ecosystem that might have developed if Odisha had controlled these resources locally, rather than having them managed by central PSUs whose strategic priorities are national, not regional.
Unquantifiable losses: the destruction of tribal cultures, the erosion of traditional knowledge systems, the generational trauma of forced displacement.

The balance sheet is structurally tilted. The credits are real but partial. The debits are comprehensive and compounding. And the most important entry — the opportunity cost of what Odisha might have become if it had controlled its own resources — is by definition unmeasurable, which is convenient for those who prefer not to measure it.

Why This Is Not Ancient History

The pattern described in this chapter is not a relic of Nehruvian socialism. It is alive and operational.

In 2024, the Odisha government — now under the BJP, aligned with the central government — approved new mining leases for NALCO in Koraput over tribal opposition. The industrial water allocation from Hirakud continues to grow, with water offtake reaching 214 cusecs by August 2025. SAIL announced plans to double Rourkela Steel Plant’s capacity, which will require more land, more water, and more environmental absorption from Sundargarh district.

The vocabulary has changed. “Temples of modern India” has become “Atmanirbhar Bharat.” “Suffer in the interest of the country” has become “ease of doing business.” The mechanism has not changed: national projects, located on Odisha’s land, using Odisha’s resources, generating value that flows to Delhi.

The “double engine” model — where the same party governs in Bhubaneswar and Delhi — is supposed to fix this by eliminating friction between state and centre. But friction was one of the few protections Odisha had. When the state government and the central government have different political masters, the state government has at least some incentive to resist central extraction — to demand better royalty rates, to insist on Gram Sabha approval before mining leases, to fight for a larger share of project revenues. When the same party runs both governments, that friction disappears. The state government becomes an implementation arm of central policy, not a negotiating counterparty.

Whether this produces better outcomes for Odisha’s people or merely faster extraction with less political resistance is a question that the next decade will answer. The historical template suggests which is more likely. But I would rather be wrong about that, and the conditions under which I would be wrong are specific and testable: if the BJP government in Odisha successfully negotiates a higher share of NALCO’s revenues for Koraput, if Rourkela’s expansion includes a binding commitment to local supply chain development, if Hirakud’s industrial water allocation is capped or reduced to protect agricultural users, then the pattern will have been broken. Until those things happen, the pattern holds.

The Deepest Cost

There is one cost of the national-project template that is harder to articulate than displacement figures or revenue leakage, but may be the most consequential of all: the psychological architecture it builds in a state’s self-understanding.

When a state’s most significant economic assets are owned and controlled by the central government, when the state’s role in its own industrial development is to provide land and labour while Delhi provides capital and captures returns, when the foundational promise to the displaced is “suffer in the interest of the country” — the state develops what might be called a colonial psychology of development. Development is something done to you, not by you. The state is a site of extraction, not an agent of transformation. Resources are gifts from geology that the nation claims, not assets that the state deploys for its own future.

This psychology affects everything: how politicians negotiate with Delhi (from a posture of supplication rather than leverage), how bureaucrats design industrial policy (attracting external investment rather than building local capacity), how citizens relate to large projects (as beneficiaries or victims, never as stakeholders with agency), and how the next generation of educated Odias understand their home state (as a place to leave, not a place to build).

Breaking this psychology requires more than policy reform. It requires a fundamental shift in the structural relationship between Odisha and its own resources — from managed colony to economic agent. The specific policy levers are clear: state-level control over mineral pricing, mandatory local supply chain requirements for central PSUs, revenue-sharing models that give mining-affected districts a direct stake in extraction value, and genuine (not performative) Gram Sabha authority over land use decisions.

None of these are technically impossible. All of them are politically difficult, because they would require Delhi to surrender control over resources it has managed as national assets for seven decades.

Nehru told the villagers of Sambalpur to suffer in the interest of the country. The country prospered. The villagers suffered. That was the deal, and it was never renegotiated. The question for the next generation is whether Odisha will continue to accept those terms, or whether it will find the political voice, the institutional capacity, and the collective will to demand a new arrangement — one in which the country’s interest and the state’s interest are not defined as mutually exclusive, and in which “national project” means a project where the nation and the locality share both the costs and the benefits.

That renegotiation has not yet begun. But the historical record is now clear enough that it can no longer be avoided.

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“NALCO’s FY 2023-24 net profit hits INR 2,060 crore amid strong sales and export growth.” Alcircle. https://www.alcircle.com/news/nalco-s-fy-2023-24-net-profit-hits-inr-2-060-crore-amid-strong-sales-and-export-growth-112096
“NALCO Pays Rs. 988.88 crore as dividend to Government of India for FY 2024-25.” NALCO. https://nalcoindia.com/pre-rel/nalco-pays-rs-988-88-crore-as-dividend-to-government-of-india-for-fy-2024-25/
“NALCO faces growing tribal opposition over Pottangi bauxite mines in Koraput, Odisha.” Alcircle, 2024. https://www.alcircle.com/news/nalco-faces-growing-tribal-opposition-over-pottangi-bauxite-mines-in-koraput-odisha-116858
“Nalco bauxite mining in Odisha faces tribal opposition.” Alcircle. https://www.alcircle.com/news/nalco-bauxite-mining-project-near-serubandha-hills-odisha-faces-tribal-rebuke-115234
“Villagers protest against grant of Bauxite lease to NALCO in Odisha’s Koraput.” Land Conflict Watch. https://www.landconflictwatch.org/conflicts/tribals-protest-against-the-grant-of-bauxite-lease-to-nalco-at-koraput-in-odisha
“Socioeconomic Impact of Industrialisation and Mining on the Local Population: A Case Study of Nalco Industrial Area, Koraput.” Hilaris Publisher. https://www.hilarispublisher.com/open-access/socioeconomic-impact-of-industrialisation-and-mining-on-the-local-population—a-case-study-of-nalco-industrial-area-koraput-2162-6359-1000273.pdf
“Industry versus Agriculture over the Water of Hirakud Dam.” Academia.edu. https://www.academia.edu/3793877/Industry_versus_Agriculture_over_the_WAter_of_Hirakud_Dam
“History of Rourkela: Steel City of Odisha’s Journey to Modernity.” HistoryRise. https://historyrise.com/history-of-rourkela-steel-city-of-odisha/

Source Research

The raw research that informs this series.