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IRON AND STEEL INDUSTRY

We must be able to answer

The Localization Factors of Iron and Steel Industry

Distribution of this industry in India and why this pattern of distribution

Its Growth and Development in pre and post -Independence periods

Future prospects of Iron and Steel industry in India

LOCALIZATION FACTORS OF IRON AND STEEL INDUSTRY

y

Raw Material

y

Market

y

T ransportation

y

L abour

y

G overnment Policy

y

T echnology

Raw Material

y

I ron and Steel industry is a Weight Losing Industry (Material Index, M.I. > 1) . All the raw

materials of this industry Coking Coal,Iron Ore,

Limestone, Dolamite, Mn are heavy and

bulky

y

L ocation is governed by proximity to raw materials particularly coking coal and I ron ore.

y

Localization either near coal and Iron ore or in between.

y

V ISW is an exception , located far from main coal producing areas. Earlier it used locally

available charcoal and now using HEP from Sharavati Power Project.


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Market

y

Finished steel products are quite bulky , and transport cost per tonne km of steel product is

about 3 times more than that of coal and iron ore. T herefore market plays an important role in

localization.

y

Agglomeration of market forces brings economics in the cost of production, thus making

market favourable location.

y

One of the major consumers of steel industry is Automobile industry which in itself prefers a

market location. T hese industries have also raised the importance of market for iron and steel

industry. Further their waste in the form of scrap provides additional raw material for iron &steel industry.

Transportation

y

B oth raw materials & finished products are bulky and require big transportation facilities .

y

Optimum transportation cost of carrying raw materials from source and finished products

to market play important role.

y

However, setting up of large integrated steel plants boosted the growth of infrastructure,

especially road and rail links in these regions.

Technology


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y

Increasing popularity of Open Hearth Process. I t uses scrap as raw material (1/2 of worlds

raw material). I t is easier to transport in raw form. T herefore, changed location of industry

from traditional raw material site to market.

Port location

y

Port locations provide easy and cheap means of transportation . T hese are also highly

helpful in the import of raw materials and export of finished products.

y

T he V izag Plant is a glaring example of this kind of location.

Government Policy

y

Trickle down hypothesis for balanced regional development guided tremendously the

location of I &S industry in the backward regions.

y

Policy of developing Growth Centres & Growth Poles with I &S industry as their core also

influenced its location in I ndia.

y

Political lobbying at times influences greatly its location.

y

VI SW Plant was set up to fulfill Defence requirements.

Labour

y

Cheap and abundant labour is required for this industry. T herefore Chottanagpur , West Bengal and the nearby regions were favourable locations.


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DISTRIBUTION OF IRON AND STEEL INDUSTRY IN INDIA

PLANT IRON ORE COAL HEP/ WATER REMARKS

TISCO G urumahisani

(Orissa) Noamundi

(Jharkhand)

Singhbhum

Jharia-

Raniganj

Subarnrekha

River

Calcutta Port NH5,

NH6

IISCO G una (Jharkhand)

Singhbhum

Jharia D V C, Damodar

River

Calcutta Port NH2

V ISW Kemmangundi

(Chikmaglur,

Karnataka)

Sharavati

Power, B hadra

River

Mangalore Port NH4

BHILAI Dalli Rajhara Korba-

Kargali

Korba T hermal

power Plant,

Mahanadi

B asin

Calcutta Nagpur Rail

NH6

ROURKELA Sundargarh Keonjhar Jharia

T alcher

Hirukud HEP,

Sankh-South

Koel River

Calcutta Nagpur Rail

NH6

DURGAPUR B olani, Mayurbhanj Jharia,

Raniganj

DV C, Damodar

River

Calcutta Port Calcutta

Asansol Rail NH2

SALEM L ocal Mettur dam Puducherry

Coimbatore by NHs

Exports Stainless steel

V IZAG B ailadila

(Chattisgarh)

I mported +

Damodar

- II largest producer,

NH5

V IJAYNAGAR Nearby Sringareni T ungabhadra

dam

BOKARO Kiriburu (Orissa)

(Keonjhar)

Jharia D V C, B okaro

& Damodar

Rivers

L argest I&S plant,

Calcutta port connected

through NH2


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TISCO Jamshedpur

y

Raw material is the most important determinant for the location of TI SCO Plant in

Jamshedpur. B esides, the latter development of transportation , easy availability of labour

and facilities of nearby Calcutta Port alongwith market around helped this plant to grow.

y

Haematite Iron Ore : G urumahisani and Noamundi, Singhbhum District within 100 km.

y

Coal : Jharia (Jharkhand) and Raniganj (West B engal) within 200 km.

y

Calcutta: Port and industrialized hinterland for market within 250 km.

y

Water: Subarnrekha River for cooling purposes.

y

L abour: Cheap and abundant: B ihar, Chottanagpur ( T ribals), Orissa.

y

G ood transport facilities: NH6 (Mumbai Kolkata) and NH5 (Chennai Kolkata) passes

near to it (part of G olden Quadrilateral)

IISCO Kulti, Hirapur and Burnpur

y

Hirapur (pig iron), Kulti (steel) and B urnpur (rolling)

y

Iron Ore : G una mines, Singhbhum district (Jharkhand) within 300 km


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y

Earlier received coal from Jharia, but now power from D V C extensively used.

y

Kolkata Port : 200 km, provides port as well as Market facilities.

y

Cheap Labour available from West B engal and adjoining areas.

y

Road links with Kolkata Port and other major destinations through NHs provide good

transportation facilities.

V ISW, Bhadaravati

y

High grade Haematite iron ore from Kemmangundi Mines in Chikmaglur district

(Karnataka): 40 km away

y

Coal not available in vicinity; earlier used locally available charcoal, but now HEP from

Sharavati Power Project.

y

Bhadra (vati) River passes through it. Water easily available. Also its valley 13 km wide

providing enough land for expanding activities.

y

Well connected to Mangalore Port .

y

NH4 (part of G olden Quadrilateral) passes near to it. Well connected by transport linkages.

L ies on Biru - Shimoga railway line.

y

Engaged in producing steel for Defence purposes .


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Rourkela Steel Plant

y

Iron Ore from Sundargarh and Keonjhar districts within 100 km

y

Coal from Jharia field (Jharkhand) and T alcher within 200 km

y

HEP from Hirakud dam

y

Water from Sankh South Koel Rivers crossing near to it

y

L ocated on main Nagpur-Kolkata railway line and enjoys railway facilities. Well connected

to NH-6 passing south to it

y

Kolkata provides port facilities and its hinterland serves as a market


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Durgapur Steel Plant

y

Iron Ore : B olani mines (Kendujhar district) and Mayurbhanj (Orissa) within 300 km distance

y

Coal : Jharia and Raniganj close to it.

y

Also uses DV C power

y

Damodar passes near it: it provides the required water supply

y

Dense Rail Road network. NH-2 (connecting Delhi with Kolkata) passes though it. L ies on

Kolkata-Asansol railway link connecting it to other parts of the country

y

Cheap labour available due to high population densityy

Kolkata Port close to it. Rich hinterland for market.


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Bokaro Steel Plant

y

Largest I&S making centre of I ndia. Engaged in manufacturing of rails

y

Obtains Iron Ore from Kiriburu Mines in Orissa.

y

Coal from Jharia field, just 65 km from it.

y

L ies on confluence of Bokaro and Damodar Rivers easy water availability.

y

HEP from Damodar V alley Corporation ( DV C).

y

Kolkata is just 300 km from it provides port facilities. NH2 (connecting Delhi andKolkota) passes just north to it.

y

Cheap labour from adjoining areas ( T ribal population)


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Salem Steel Plant

y

Area is rich in I ron Ore. T his ore is converted into higher grade and then smelted in Plant

y

U ses HEP from nearby Mettur dam .

y

Well connected to Puduchery and Coimbatore by National Highways.

y

Major producer of the world class stainless steel . Exports to U SA, Mexico, Australia and SE

Asia.

y

State-of-art technology , and therefore not much labour required

V ishakapatnam Steel Plant

y

First shore based integrated steel plant of the country

y

Most sophisticated technology

y

Second largest producer of I ron & Steel in India

y

Port location makes import and export easy. Major export-oriented steel plant.

y

Iron Ore :B

ailadila mines of Chattisgarhy

Coal : uses imported coke, thus relieving pressure on I ndian coal mines. Also well connected

to coal fields of Damodar valley.

y

L ies on NH-5 connecting Chennai with Kolkata

V ijaynagar Steel Plant


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y

L ocated near Hospet in B ellary District of Karnataka

y

Production of mild steel is the special feature

y

Iron ore from nearby mines in Karnataka

y

Coal from Sringareni in Andhra Pradesh

y

HEP from closely located Tungabhadra Dam

MINI STEEL PLANTS

y

Secondary units using steel scrap and sponge iron as raw material; and electric arc and

induction furnaces for processing

y

Produce mild and alloy steel especially stainless steel

y

L ocated away from integrated plants to meet local demands

y

Mainly concentrated around urban areas


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GROWTH AND DE V ELOPMENT

y

Indians known for art of smelting iron in early times e.g. Mehrauli Pillar . B ut first I &S unit on

modern lines was set up in 1830 at Porto-Nova (T.N) - not succeeded.

y

Other attempts in second half of 19 th century same fate.

y

Real beginning in 1907 with setting up of TISCO Plant at Sakchi (now Jamshedpur)

y

1919 IISCO (Indian I ron and Steel Company) set up at B urnpur

y

1923 Mysore Steel Works set up at Bhadravati . Now called V ishvesvaraya I ron and Steel

Works ( VI SW)


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Rapid growth after independence

y

T he development of I&S industry was envisaged during first Five Year Plan (FYP), but it was

during Second FYP that three integrated steel projects were started at Bhilai (with erstwhile

USSRs

Technical and Financial support), Rourkela (with

Germanys assistance) and Durgapur

(with U .Ks assistance)

y

During Third FYP , Bokaro Steel Plant was started (Production started in 1972).

y

T hree more steel plants planned during IV FYP to meet the requirement of steel.

1.

Salem (T .N.)

2.

V izag (A.P.)

3.

V ijayanagar (Hospet district in Karnataka)

y

Coming up of SAIL in 1973 provided an umbrella corporation for managing plants in public

sector.

Slow Growth (1950-60)

o

New PS U s had yet to start production

o

L ow capital availability

o

L ow installed capacity

o

L ow Demand for the finished products

Exponential growth (1960 mid 90s)

o

Started with coming up of Bhilai, Durgapur and Rourkela Plants

o

Expansion of existing plants

o

Industrialization took place at a faster rate, therefore higher demand for steel

o

Increased per capita consumption

Plateau Section (Stagnation) (Mid 90s 2001)

o

After liberalization, tertiary sector started becoming more important

o

Losses of PSUs mounted high pressure on the plants themselves

o

Competition from abroad.

Impact of Liberalisation


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o

After decades of state orchestrated industrial development, the government going by the

experience world over decided to launch the process of liberalization and the steel sector was

also opened to international market and associated competition.

o

With the start of new millennium, increase in production because of infrastructure

development and exports . Annual G R of Production 2001-02 3.7% and 2002-03 8%.

FUTURE PROSPECTS OF STEEL INDUSTRY

y

T he recent upswing in the international steel market has been a booster dose for I ndian steel

industry but the real party can begin only when the domestic market offers right environment

and opens up avenues for long-term sustenance and growth.

y

T he potential for growth of this sector is enormous. T his can be gauged from the fact that the

per capita consumption of steel is still around 29 kg whereas the world average is 150 kg.

Even to equal the world average, with its population over a billion, will have to touch 150

million tones (present consumption 29 million tones).

y

G eneration of such kind of demand is dependent on health and rate of growth of other

sectors of economy like roads, power, railways, ports, drinking water, housing and

manufacturing.

y

New Road Projects estimated to cover around 10,000 kms, four laning of existing roads is

also planned. T hese will be a good source of new demand for steel.


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y

As the country will need more Greenfield capacities in the coming years, the steel sector can

hope to get the required impetus for steady growth.

y

Track renewal plans of railways for about 35000 kms. T his will boost the demand for steel

in a major way. More high-speed trains, new demand for coaches and wagons, and building of

underground railway system will help boost its demand.


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EARTHQUAKE

RELE V ANCE OF THE STUDY

Earth is in a dynamic equilibrium, always adjusting herself to maintain this dynamism. Earthquakes

are the most prominent evidence of present day earths movements. T hough man has no control over

earthquake, its proper study, early prediction and remedial measures could help in better management

of disasters and saving precious human and animal lives.

CONCEPT

Crustal plates are continually in motion, interact with neighbouring plates, strain and deform rocks at

their edges. T he energy stored by such deformation is released when it crosses the elastic limit of

rocks, in the form of waves called Earthquake.

WA V ES

Earthquake waves are of 3 types: P, S and L . P are fastest. However maximum damage is caused by

L -waves, which travel along the surface of earth.

MECHANISM

T here are major 3 mechanisms that cause earthquakes:-

1.

Plate Tectonics

2.

V olcanoes

3.

Anthropogenic Factors

ROLE OF PLATE TECTONICS

y

T he Crustal Plates have three kinds of motions , namely:

Divergence

Slip and

Convergence


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y

At the Divergent boundaries , Crustal Plates move away from each other. T here is formation of

faults and ruptures and an associated volcanic activity . T his causes earthquake tremors ,

though of shallow origin . e.g. the earthquake activity along Mid-Oceanic Ridges of Atlantic,

Indian and Pacific Oceans.

y

Along the Slip Boundaries , one side of the slip fault slides along the other part and the locked

rocks in a jig-jag fashion break. T he creation of transform faults takes place, resulting in severe

earthquakes . e.g. in California (U SA), Pacific Plate moves north west the American Plate along

the San Andreas Fault . T he earthquakes of intensity are experienced here.

y

T he maximum number of earthquakes takes place along convergent boundaries . Here one

Crustal Plate moves under another Plate. T he huge force of such a movement is responsive for an


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intensive earthquake activity here. I t explains the earthquakes along Pacific Ring of Fire and

Alpine-Himalayan Mid-Continental Belt . On these margins, simultaneous activity of

mountain building, faulting and explosive volcanicity cause earthquakes of shallow,

intermediate and deep origin . T he epicenter of shallow earthquakes lies near the trench (where

two Plates meet) and that of deep earthquakes lie on the interiors of continents.

Along Pacific Ring of Fire , Subduction of Pacific Plate under N. American and

Asiatic Plates causes earthquakes in eastern and western margins respectively. I t accounts for

65% of total earthquakes of the world . Earthquakes in Rockies, Andes, Kamchatka,

Sakhalin, Japan and Philippines are attributed to this kind of movement. In Japan alone, about

1500 seismic shocks are felt every year.

Mid-Continental Belt accounts for about 21% earthquakes in the world every year.Earthquakes in Alpines, Mediterranean, North Africa and Himalayas are attributed this

cause. In I ndia, Himalayas Plates are still moving @ 5cm/ year, as evident from recent

earthquakes of Uttar Kashi (1991) and Chamoli (1999). Himalayas fold at places and when

the energy reaches the elastic limit, the rocks break up and trigger strike-slip earthquakes.

Himalayan Fault Zone consists of a complex grid of interactive faults extending all along the

colliding zone.


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T he Indian earthquake zones consist of Indian Plains (moderate intensity) and

Peninsula (least intensity) alongwith the Himalayan Region (max. intensity). T he plains, though

exhibited moderate intensity earthquakes, few exceptions of B ihar (1934), Assam (1950),

Kolkata (1737) and B ihar (1988) are of severe earthquakes. T he Plate Tectonic Theory well

explains the origin of severe earthquakes here ( the epicenter of deep and severe earthquakes lie

in the interior of continents ).

Recent Bhuj Earthquake (2001) was because of Sea Floor Spreading of I ndian

ocean @ 5cm/ year , gradual northward movement of I ndian Plate and the reactivated faults

below the surface. T wo major connecting faults located in Kutch region: one, E-W between B huj

and Ahmedabad and the other, N-S through Ahmedabad and B aroda.

ROLE OF V OLCANICITY (details in the chapter on V olcanicity)

Volcanicity and earthquakes are so intimately related that they become the cause and effect of each

other. V iolent eruption of Krakatoa V olcano (between Java and Sumatra) caused severe

earthquake and consequent tsunami (30-40 m high) killing many thousand people.


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ANTHROPOGENIC FACTORS

Pumping out of ground water and oil, mining, nuclear explosion and dams trigger earthquakes

through the collapse of rocks above and powerful vibrations caused by them. Dams disturb the

equilibrium of already iso-statically adjusted rocks below the reservoirs and cause the

development of faults and fractures. 1931 Greece earthquake (Marathan Dam), Koyna earthquake

(1967), B hatsa Dam ( I ndia) are few of the examples.

DISTRIBUTION

y

About 68% of the earthquakes are concentrated around Pacific Ring of Fire and 21% along

Alpine-Himalayas Chain .

y

95% of the earthquakes are along distributed along Plate boundaries and rest are caused by

V olcanicity and other factors.

y

Of the total earthquakes, 90% are of shallow origin along the divergent boundaries and along

convergent boundaries near the trench areas.


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IMPACT OF EARTHQUAKES

Earthquakes demonstrate a man-nature interaction where the nature clearly dominates over man.

T hese have both geographical as well as human consequences , both long term and short term.

T hese include:

y

L andsides ( L athur), damming of rivers, floods.

y

Faults formation, fall of buildings, loss of life and property.

y

Damage to Oil pipelines, electric wires and consequent fires.

y

Change in surface drainage and underground circulation of water.

y

T sunamis and consequent damage to life.

B huj Earthquake of 2001 killed 1 lakh people; in Kolkata (1737) it claimed 3 lakh lives.

REMEDIAL MEASURES

Man is unable to prevent earthquakes; all he can do is to take steps for safety.


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y

More seismic stations for issuing warning. L ong term predictions based on cyclic nature of

earthquakes and paleo-seismology.

y

Suitable building designs

y

Observations like sudden change in climate, abnormal behaviour of animals .

y

Special trainings as in case of Japan.y

Effective Disaster Management Mechanism based on the principle of 3RS- Rescue, Relief

and Rehabilitation.

y

Coordination among various national and international agencies.


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SOCIAL FORESTRY

We must know:

Introduction and concept

Difference between Agro and Social forestry

Social forestry in India

(a) Farm Forestry

1. Block Planting

2. Peripheral Planting

(b) Extension Forestry

Case Studies

Problems in social forestry

Social forestry is a concept or mission and a program that aims at providing social, economic and

environmental security to the people especially those who are poor and more so to the

downtrodden, by involving them as beneficiaries right form the planting stage to the harvesting stage.

I t envisages the use of village land, community land, wasteland and degraded land to raise crops that

will be useful for the community as a whole. Concept of social forestry will be different in different

regions.

DIFFERENCE BETWEEN SOCIAL AND AGRO FORESTRY

Agro Forestry Social Forestry

Combines with the production of agriculture ,

crops, forest, forest plants and fodder species

simultaneously or sequentially on the same units

of land

Include forest crops including food, fodder,

fuel wood and small timber to meet the

multifarious demands of the society

I t is a different package of technology that has

to be developed before implementation

T his is not required in social forestry and

fallow lands are utilized for raising forest

crops

T here is a close crop relationship whose

cultivation is determined by the demands of

region, demands of person etc.

Forest crops are raised either independently

or in combination with other forest crops

including legumes and grasses. T his does not

require such a deep research on the

interrelationships.


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B oth components of farm forestry were part of centralized sachems of the government. T his has

been one of the most successful aspects of the social forestry in which saplings were distributed to the

farmers for afforestation on their field bunds.

Further, in order to encourage poor farmers to undertake afforestation, saplings were distributed

free . T he department established large centralized nurseries primarily of eucalyptus for distribution

to farmers. Eucalyptus was selected not because the poor farmers wanted it for fuel and fodder but

because it was easier and cheaper to raise eucalyptus sapling and because they were non-browsable

and had a ready market .

In reality farm forestry became subsidized program for the bigger farmers and they came in their

trucks and tractors and collected thousand of free saplings planting them in their fields. Many

converted agricultural lands to eucalyptus plantation because of their higher profits and when the trees

were ready they sold produce in markets as poles or wood for paper and pulp industry . T he missionof fuel wood and fodder for the rural poor seemed sight fact by the strategies followed.

Another reason for large centralized nurseries and free distribution was the pressure to achieve

targets . What land, what survival rates, who benefited all of these became inconvenient questions.

T he major beneficiaries have been larger farmers on one hand, and paper and pulp and building

industry on other. Acute shortages of fuel wood and fodder continued to persist.

CASE STUDIES

West Bengal

In West B engal, the social forestry has been more successful because the village panchayats were

actively involved in identifying land and beneficiaries . Revitalization of village panchayats in West

B engal was based on implementation on land reforms and distribution of surplus lands . A group

scheme of social forestry emerged in these villages by landless people who were distributed surplus

land, fuel wood folder, and also cash incomes increased. T he forest department also negotiated with

several village communities to protect forest on the basis of an agreed sharing scheme . T he

protection of forests by the village communities has been so successful that the West B engal

government has extended scheme to others parts of the state.

Chipko Movement


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I t is a successful story of afforestation and sustainable use of forests and the principle of equality in

the distribution of equal resources. In the chipko villages in the Himalayas, the women in villages

have organized themselves for safeguarding their ecosystem and developing their fuel wood and

fodder resources in their common land. T hey identified fragile slopes and planted them to prevent

landslides. T he species were planted by the liking of the people. Chipko woman have developed an

equity approach to sharing the biomass . T hey all are entitled to ahead load of the commons on a

given day date of the week and this is strictly adhered to.

Sukhomadri

I t is another successful example of local organization based on equitable sharing of resources in the

Shivalik hills. T he sukhomadri village has been able to protect its watershed and saved the village

from falling into a widening gauge because of massive erosion. Apart from it they have been also able

to achieve social well-being of the village people in the span of 3-4 years.T

his village alsoestablished the water users association which provide equal share of rain water collected by

building a small dam. Even the landless are entitled to eco-share which they can barter for share

cropping, money etc. Everyone in the village has vested interest in safeguarding watershed so that the

dam does not get silted. Although the forest department did try to impose certain restrictions but

realized later on that unless the people themselves do not show concern and the communities did not

get involve, they will hardly be able to safeguard their watershed. When the community established its

own organization and assured equitable distinction of benefits, only then the every member of the

community endeavored to safeguard afforestation in the watershed.

However, Social foresting program of government dominated by bureaucracy eliminated wider

participation of people in their own programme. Lack of land use policy and market for minor

produce of beneficiaries further accentuated the problem.

PROBLEMS WITH SOCIAL FORESTRY

1.

Social forestry was conceived as people centered program. A program to empower poor

people for the fuel wood, fodder and other timber needs. B ut it actually became a

government program and the program of the forest department.

2.

Peoples participation was the major causality and it was realized later on that peoples

participation cannot be achieved through bureaucratic structure.

3.

T here had been a neglect of land use policy especially for the forest lands, revenue lands and

community lands and the price for this had been paid by the poor.

4.

Different administrative jurisdictions of land have led to property and custodial approaches

to land use policies, irrespective of their best use and contribution to social welfare.


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