Finance minister Nirmala Sitharaman said at a televised press briefing in Patna on Tuesday that a policy aimed at making minerals priced at the same level across the country that existed for four decades up to 1992-93 weakened the incentive for industries to be set up close to mining regions, affecting the development prospects of mineral-rich eastern states.
Nirmala Sitharaman says the region, which suffered due to the “fight equalization policy,” is now at the core of the National Democratic Alliance (NDA) government’s development strategy.
“Today we say, we also said it in Parliament on the day of the vote on account, we are building a developed India by 2047 and that journey of progress will powered by all the eastern states,”
The minister explained that the freight equalization policy aimed to encourage factories to be built anywhere in India by subsiding mineral transportation costs, and as a result, coal mined in Bihar cost the same in Mumbai.
This policy has had disastrous effects on states of eastern India as the policy weakened incentives to set up industries close to mining regions, encouraging factories to be set up further away and negatively impacting these states’ economic prospects. That also led to people moving out in search of employment, the minister.
The minister explained that the Modi government has consistently prioritized the eastern part of India, as captured in the interim budget for 2024-25.
Left-wing extremism in this region has significantly declined during the Modi government, as seen by the 76% drop in occurrences between 2010 and 2022.
Sitharaman added that one indication of the government’s attention to the area is the resuscitation of state-run fertiliser facilities in the area during the NDA administration. The three fertilizer facilities located at Barauni, Sindri, and Gorakhpur have a total capacity of 38.1 million tonnes per year. Reviving the urea factory in Barauni, Bihar, came at a ₹9,500 crore cost.
