The Business Bytes
THEBUSINESSBYTES BUREAU
BHUBANESWAR, JUNE 16, 2025
In 2008, a landmark judgment by a three-judge bench of the Supreme Court of India, led by Justice S.H. Kapadia (who would later serve as the Chief Justice of India), sought to redefine the contours of development. At the centre of the case was the proposed bauxite mining project in Lanjigarh, Kalahandi district of Odisha — a region among India’s most impoverished. The Court’s verdict didn’t merely permit mining; it carved out a progressive, responsible model that envisioned transforming Kalahandi through sustainable industrialisation, social upliftment, and environmental care.
Nearly two decades later, the project lies dormant. And India, despite its vast bauxite reserves, continues to import what it abundantly possesses — missing a golden opportunity for resource-led self-reliance and regional development.
A Supreme Vision: Growth Anchored in Responsibility
Justice Kapadia’s ruling was a milestone in India’s legal and developmental history. It presented one of the country’s most comprehensive frameworks for environmentally and socially responsible mining. It laid down strict conditions that were not just safeguards, but commitments to inclusive growth.
The judgment mandated that 5% of the net profit from the project be allocated towards the development of local communities — funds that could have been used to build hospitals, schools, roads, and irrigation infrastructure across Kalahandi.
It required compensatory afforestation using native plant species, with the afforested areas managed as protected forests to ensure ecological balance.
Phased ecological restoration of mined areas was made mandatory, including the backfilling of overburden to rehabilitate the land post-mining.
Hydrogeological studies were prescribed to assess and protect groundwater quality and ensure sustained stream flows in surrounding areas.
The judgment called for comprehensive wildlife assessments, to be conducted in collaboration with national-level institutions, to safeguard biodiversity.
Development of green belts and safety zones was required, to be maintained by the Forest Department with funding from the industry, creating buffer areas for environmental protection.
Rehabilitation and resettlement of displaced families had to be implemented under Odisha’s 2006 policy — not as an afterthought, but as a central requirement for project approval.
The judgment directed payment of Net Present Value (NPV) for forest land diverted for the project, in accordance with forest conservation rules.
It also required the implementation of a detailed Wildlife Management Plan to mitigate risks to local flora and fauna.
Most importantly, a comprehensive Tribal Development Programme was mandated, one that respected indigenous culture while providing access to education, healthcare, livelihood opportunities, and modern infrastructure.
This was a vision of mining with conscience — a pioneering template that recognised mineral wealth as a means to uplift, not exploit. But sadly, this blueprint remained on paper.
A Nation That Imports What It Owns
Fast forward to today. India holds over 5 billion tonnes of bauxite — roughly 8% of the global total — yet imports more than 4.4 million tonnes annually. In FY 2023–24 alone, the country spent ₹2,11,481 lakh (over ₹2,000 crore) on importing metallurgical-grade bauxite. That’s a national irony: bleeding precious foreign exchange for a resource we already have, while ignoring the opportunity to channel those funds into rural and tribal development.
Industry data shows bauxite demand currently at 20 million tonnes per annum (MTPA), expected to climb to 29 MTPA with expansions like Vedanta’s Lanjigarh refinery. Without unlocking domestic reserves, India will continue its costly dependence on imports — undermining both supply security and economic prudence.
In a country striving for energy transition, infrastructure growth through Gati Shakti, and Atmanirbharta (self-reliance) in defence and aerospace, this overreliance on imports isn’t just bad economics — it’s a policy contradiction.
The Real Loss: Human Potential
Beyond economics, the real tragedy lies in the human cost of inaction. Each year of delay means another child walking kilometres to attend a dilapidated school, another patient travelling for hours to a basic health facility, another farmer struggling without irrigation in a drought-stricken field.
The Supreme Court’s 2008 judgment was not just forward-thinking — it was compassionate. It recognised that India’s true wealth lies not in minerals buried underground, but in empowering its people. Yet, the failure to implement this vision has left regions like Kalahandi suspended between potential and neglect.
The Way Forward: Honour, Not Hesitate
Reviving the Lanjigarh bauxite project is no longer just an economic decision — it is a moral and developmental imperative. But it must be done the right way: not through shortcuts or coercion, but through honest, inclusive dialogue.
The people of Kalahandi must be given centre stage. A Gram Sabha must be urgently convened — not as a tick-box exercise, but as a genuine platform for participatory democracy. It must listen to the voices of those who matter most: the tribal communities whose future depends on both protection and progress.
The verdict was delivered. The blueprint exists. The question is — will India act on it?
Time is running out. The opportunity is not lost yet — but the window is closing fast.
