Kalahandi is one of the most economically backward districts of Orissa. However, it has rich deposits of bauxite over its hill ranges. Recently the State Government and its corporation have entered into agreement with certain industrial houses for creating infrastructure to extract bauxite and process it.

Water is replenishable but finite resource. The annual overall availability of surface water in Orissa is about 85.59 billion m. The population of Orissa is 4% of that of the country, according to 2001 census. The State has 11% of the water resources of the country. The per-capita availability of water in 2001 was 3359 m. By 2051, it is likely to reduce to 2218 m . With increasing population and the consequential increase in demand for food and water and with the growth in mining and industrial activities, the demand for water from various sectors is likely to increase to 55 billion m.

Orissa is an agrarian State. Almost two third of its total work force depend on agriculture for employment and sustenance.