Thursday
February 21
2019

Viewpoint: Has Narendra Modi been good for business?

By Ken Koyanagi

The village of Dhenkia sits in a fertile region of the eastern Indian state of Odisha that is known for its cultivation of the betel vine. Chewing betel leaves is popular with Indians, making it a reliable cash crop for Dhenkia and the surrounding villages.

But in recent years, the village of about 1,000 residents has become known for something else: blocking the ambitions of one of the world’s largest steelmakers. In the process, Dhenkia became a symbol of some of the Indian economy’s most intractable structural problems.

In 2005, the state government of Odisha and South Korean steelmaker Posco, the world’s fourth-largest producer, agreed to build a massive 12-million-ton steel mill on 1,620 ha of land near the port of Paradip facing the Bay of Bengal.

At the time, the project was said to be the biggest-ever foreign direct investment in India, with 520 billion rupees ($7.3 billion) set for the mill’s construction. It would have created at least 7,000 jobs at the plant itself, and a staggering additional 870,000 jobs would have been created to supply raw materials, logistics and other related businesses, according to estimates by scholars at the Deakin University of Australia.

Photo courtesy of Narendra Modi Flickr.

Source: Nikkei Asian Review (link opens in a new window)

Tags
business, economic development