This is abstract of seminar not presented at IARI, New Delhi due to hostile environment towards topic.

1. Name: Gourav Kumar Vani Seminar leaders: Dr. P. Venkatesh
Chairman: Dr. Amit Kar and Aditya K.S.
Roll no: 10678 Date: 28-01-2016, Time: 2.30 pm
Seminar Title: “Curse of Natural Resources: Theory and Evidences”
Abstract
Economies around the world differ in their natural resource deposits. Some of these countries
have managed to utilize their natural resource abundance to their economic advantage while others
did import resources to fuel their economic growth. However, some set of countries could not derive
economic advantage out of natural resource abundance like Congo, Sierra Leone etc. This seminar
focuses on the economic problems arising out of natural resource abundance and excessive
dependence on it. The situation of having bad or worse economic outcomes for economy due to
resource abundance is referred to as resource curse. There are various theories existing in favour and
against the resource curse thesis. Staple thesis, advocated by Canadian economists Innis and
Mackintosh, pointed that staples (resource with minimal or no processing) can be exported to advance
economically. Dutch disease models and political economy models are supporter of resource curse
thesis. Dutch disease models explained the phenomenon on purely on economic grounds while
political economy models tended to focus on institutional aspects explaining resource curse.
India is a country blessed with natural resources. So it is obvious to expect resource curse thesis
applicability on India too. To examine the thesis few attempts were made although research output
not without caveats. To overcome the barrier, a study was conducted to examine the effect of
resource sector (agriculture, forestry, fishery and mining & quarrying) on growth rates of real net state
domestic product per capita for period stretching from 2000-01 to 2010-11. Even after controlling for
infant mortality, forest cover, initial domestic product, urbanization, coastal length, SC/ST population,
literacy rate and work force, resource sector was found to have negative effect on state domestic
product. This confirms the resource curse hypothesis for Indian states.
Measures suggested for avoiding resource curse are namely, diversification, resource price
volatility reduction measures, adoption of devices to share resource price risk, making institutions less
grabber friendly, appropriate monetary and fiscal policy.
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Division of Agricultural Economics
ICAR- Indian Agricultural Research Institute, New Delhi