Model Question and Answers for APSC | Natural resource rich belts in India are not always the one with the highest levels of Economic development. Explain. (APSC Mains 2020 GS- I)
Ans : India has an abundance of mineral deposits. The country is the second-largest producer of steel; the third-largest producer of coal; the fourth-largest producer of iron and has the fifth-largest bauxite reserves in the world. Overall, India produces over ninety different types of minerals.
Natural resource curse
1. A country with such a rich resource base should leverage its economic growth and wealth creation capacity on this inherent strength.
2. However, as of 2017-18, the mineral sector (minus petroleum and natural gas) accounted for merely 1.53 per cent of the country’s GDP. By comparison, in economies like South Africa and Australia, the sector accounts for around 8 percent of the GDP.
3. Moreover, the resource-rich regions in India — the states of Jharkhand, Odisha, and Chhattisgarh — have some of the lowest per capita incomes in the country.
Negative correlation between an abundance of natural resources and sustained economic growth
1. These statistics are an extension of the so-called "natural resource curse" — the counterintuitive phenomenon where an abundance of resources is often associated with poor development outcomes of regions.
2. Research shows that there exists a negative correlation between an abundance of natural resources and sustained economic growth.
3. The explanation for the resource curse varies from country to country but an underlying theme of weak governing institutions prevails where the gains from resource extraction are captured by a few elites.
4. The resource industry in India has suffered from a variety of similar issues from illegal mining to environmental concerns.
5. It has also over-corrected for these problems as reflected in the Supreme Court ruling to cancel numerous mining leases across the country that has brought the sector to a halt over the last few years.
6. Additionally in India, forest rights of tribal communities and their lack of political assertion makes it difficult for them to benefit from minerals in their regions
1. Improve governance in resource rich regions
2. Increase penetration of hard and soft infrastructure in resource rich regions
3. Curb illegal mining
4. Empower tribals and integrate them in decision making process, enforce tribal rights legislations without affecting development
5. Use of the mining sector itself as a source of employment generation and economic development. As per the 12th Five Year Plan, for every increase in economic growth by 1 per cent, the employment created by the mining sector is thirteen times more than agriculture and six times more than manufacturing.
The introduction of the National Minerals Policy is a step in the right direction, but policy needs to be completely conducive to driving the growth of the resource industry. The opportunity to leverage upon the sector to drive jobs, growth and opportunity should not be floundered. By enabling labour-intensive growth, India can get its growth story back on track and eliminate poverty at a much faster rate. An unlikely sector of resource mining holds the key.