Economy of Chhattisgarh: Structure, Agriculture, Forest Produce, Industry & Food Security — CGPSC GS Paper III Part 1

Weightage: Part 1 of GS Paper III covers the Indian and Chhattisgarh economy. The Chhattisgarh items are the structure of the state economy, agriculture, the public distribution system, forest produce, industry and regional development. The next chapter covers state finance, credit, cooperatives and social indicators. Every figure below is an Economic Survey estimate or a dated figure, and should be treated as such.

1. The shape of the state economy

Chhattisgarh is an unusually industry-led economy for its income level. In the state Economic Survey for 2025-26, industry (mining, manufacturing, power and construction) contributed nearly half of the gross state value added at current prices, services about a third and agriculture and allied sectors about a fifth.

Gross State Domestic Product for that year is estimated at roughly ₹6.3 lakh crore at current prices, and per capita income at roughly ₹1.8 lakh. Both are estimates, and the survey frames them as projections.

Two features follow from this shape.

• Output and employment diverge. Agriculture produces a fifth of the value but still employs a much larger share of workers, so farm incomes and rural poverty stay central to policy.
• Minerals carry the economy. Coal, iron ore and power underpin the industry share, and mineral royalties are a large source of state revenue.

2. Agriculture and paddy procurement

Paddy dominates cropping, as the geography chapter showed. The state government buys paddy at the Minimum Support Price (MSP) through primary agricultural cooperative societies and village-level procurement centres, with the state marketing federation MARKFED as the nodal agency and payment by direct bank transfer.

On top of the MSP, state governments have paid additional input assistance or bonuses, and the amount has changed with successive governments and their announcements. Quote the current figure only from a live notification, and describe the mechanism, not the number.

The cooperative procurement system is one of the state's administrative strengths. It also ties farmers to the credit and storage network described in the next chapter.

3. Food security and the public distribution system

Chhattisgarh was the first state to pass its own food-security law. The Chhattisgarh Khadya Suraksha Adhiniyam (Food Security Act) was passed on 21 December 2012, before the National Food Security Act of 2013. It made subsidised food grain a legal entitlement for a very large part of the population.

The state's PDS reforms are the reason for its reputation.

• Fair price shops were shifted from private dealers to community bodies: gram panchayats, women's self-help groups and cooperative societies.
• Records and stock movement were computerised, and grain was tracked to reduce leakage.
• The reforms were widely studied and cited when the national law was framed.

Entitlements and prices have been revised by amendment and by the national Act, so cite the mechanism and the year of the law.

4. Minor forest produce

Forests give tribal households a large share of their cash income. The Chhattisgarh State Minor Forest Produce (Trading and Development) Cooperative Federation handles collection and marketing through primary societies, and runs retail outlets under the Sanjeevani name.

Tendu leaf, used for beedis, is the biggest item, and its collection season runs from April to June. Other items include sal seed, mahua, harra and lac. The state is a leader in buying minor forest produce at support prices, with some items on the national list and others added by the state alone.

Value addition through self-help groups and the national Van Dhan centres is the policy direction, since raw collection earns little.

5. Industry, mining and regional development

The mining-power-steel belt is the core of industry: coal and power at Korba, steel at Bhilai, aluminium at BALCO, and iron-ore mining at Bailadila. Mining is a large source of non-tax revenue for the state, including royalties and the District Mineral Foundation funds meant for affected areas.

The state has issued successive industrial policies to attract investment, and a new policy for 2024-30 was announced in 2024. Naya Raipur was planned as a modern capital and investment hub.

Regional development authorities for Bastar, Surguja and the central region were set up to plan for areas with different needs. Several of the state's most backward tribal districts, largely in the south, are also among those identified by NITI Aayog for focused development.

Worked example 5.1 (an 8-mark answer, ~100 words). "Explain the significance of the Chhattisgarh model of the public distribution system."

Model answer. Chhattisgarh reformed the PDS by moving fair price shops from private dealers to community bodies such as gram panchayats, self-help groups and cooperatives, and by computerising records. It was also the first state to pass its own Food Security Act in December 2012.

The reforms reduced leakage, improved access for the poor and were widely cited when the National Food Security Act of 2013 was framed. However, challenges remain in nutrition, identification of beneficiaries and last-mile delivery in remote tribal areas.

Common traps CGPSC sets here

• Treating agriculture as the largest sector by output. Industry is the largest, though agriculture employs the most workers.
• Quoting a paddy bonus figure as permanent. It has changed with governments, so describe the mechanism.
• Saying the National Food Security Act came first. The state's own Act (2012) preceded the national one (2013).
• Naming tendu leaf as a food crop. It is a minor forest produce, used for beedis.
• Ignoring mining's fiscal role. Royalties and the District Mineral Foundation are a major state revenue and development source.

Memory aids

• "Industry half, services third, farm a fifth": the sector shares in rough terms.
• "First state, 2012": the Food Security Act.
• "Panchayat, SHG, cooperative": who now runs the fair price shops.
• "April to June": the tendu leaf season.

Summary

Chhattisgarh's economy is led by industry, driven by mining, power and steel, while agriculture employs far more people than its output share suggests. Paddy is bought at MSP through cooperatives, and the state was the first to enact its own Food Security Act in 2012 and to reform the PDS with community-run shops.

Minor forest produce, above all tendu leaf, sustains tribal incomes through a cooperative federation. Mining revenue, industrial policy and regional development authorities complete the picture.

Exam protocol

• Say that industry dominates output and agriculture dominates employment.
• Describe the procurement and PDS mechanism, not a changing rupee figure.
• Tie every industry answer to mining revenue and its tribal cost.