Jharkhand suffers from what is sometimes called resource curse

Jharkhand suffers from what is sometimes called resource curse

What is Resource Curse?        

Resource curse or the “paradox of plenty” is a situation in which regions with an abundance of non-renewable natural resources experience stagnant economic growth or economic contraction. Usually, when all of the production means are focused on a single industry and investment in other sectors is neglected, states and countries struggle to harness the ample natural resource reserves.

Understanding the fallout

In 2000s, Jharkhand was potentially the richest among the three newly created states (Jharkhand, Uttarakhand and Chhattisgarh) – endowed with rich forest resources, mineral resources with an equally fertile land and adequate rainfall. It accounted for more than 40% of mineral resources of India with coal contributing to 27.3%, iron ore- 26%, copper ore-18.5% along with rich reserves of Uranium, mica, bauxite, magnetite and dolomite among others. The state started industrializing over a century ago when the Tatas set up a steel plant in Jamshedpur. By 1939, Tata Iron and Steel Company operated the largest steel plant in the British Empire. Yet, Jharkhand is in a paradoxical state. Languishing near the bottom among the 29 states on most human development Indices, it is one of the ailing states of India. 39% of its population is below poverty line and 19.6% of children under five years of age are malnourished. With an urbanization percentage of merely 24%, it is behind Uttarakhand and Chattisgarh both in terms of Human Development indices and Gross State Domestic product.

Jharkhand is stuck in a low-level equilibrium trap accounting to political instability, massive corruption and industrial stagnation. Once regarded as a mining and manufacturing hub, recent data shows that the biggest decline is in manufacturing sector while the service sector is doing surprisingly better. Several scholars put forth that the common rhetoric that the highly potential mining sector is looming about in jeopardy.  Moreover, the major struggles find its roots in the ruling elite earning large sums from leasing natural resources as in the case of former Chief Minister, Madhu Koda.

What lies ahead is a need for immediate socio-economic revamp by interest groups and the state and central government. The stakeholders are needed to be brought on a single platform to formulate effective synergy in this regard.

Harshita Kumari

Harshita Kumari

Harshita is a dreamer by all means and a bibliophile by the day. Pays keen attention to details and likes keeping up with the dynamics of social world.

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