Orissa, in eastern India, is a resource-rich state, known for its abundant mineral, hydrologic, forest and other resources, and for this reason it has been attracting large public sector development projects right from the beginning of the planning era in early 1950s. Under the globalization influences, the state government has recently introduced liberal industrial and other policies with the specific aim of attracting foreign direct investment, allowing private industry to play a role in the development process even larger than its own. The rich natural resource endowment and now the new investor-friendly policies make Orissa a particularly attractive destination for large corporations including multinational corporations (MNCs), and they indeed are lining up in numbers to invest in this state, especially in steel, alumina and mining industries. While the government is welcoming large corporations that have their eyes on mineral-rich tribal areas, the tribal people who form a large part of the local population are opposing them. From their perspective, the track record of development projects set up in their territories so far has been dismal. They have been displaced from their lands, their homes, their livelihoods, and their communities, in some cases even more than once, becoming poorer than before. Often, those demanding compensation have been met with brutal repression, with some even losing their lives. The recent events in Kalinganagar industrial complex, where the police firing led to the death of about a dozen people, have further strengthened their belief that the state is interested only in taking over their lands, not in what happens to them with their livelihoods gone; its interests lie elsewhere, in helping large corporations to make huge profits at their expense. Supported by activists groups, the tribal people are now becoming assertive, even hostile to the establishment of new projects whom they expect to do nothing but ruin their lives, leaving them in the worst forms of impoverishment. In response to growing discontent with displacement arising from a rapid process of industrialization, the government initiated a process of making a comprehensive resettlement policy applicable to projects in both public and private sectors, and the UNDP assisted it with a draft resettlement policy. However, the policy which the government has now issued is in a form somewhat different from that suggested in the draft policy, and is unlikely to meet expectations of the people affected. The other worrying aspect is that Orissa lacks adequate management capacity to address resettlement issues, so the policy guidelines may not prove much helpful to those requiring resettlement. This paper, based on first hand field experience, concludes that development goals of the Orissa government will remain elusive, if the affected people perceive the state as only MNCs-friendly, and not as one concerned about their future.