Development is multi-dimensional and always strives for a positive growth in continuum. The economic reforms of 1991 in India were initiated, among other things, to achieve social justice and equity. In spite of our experience of economic reforms for more than a decade, poverty and economic inequity still exist. Economic reforms have failed to bring in a positive impact on the toiling masses living in the rural areas. People living in these areas are still devoid of the development and welfare objectives of the economic reforms. Poverty still persists for which people also suffer from other ancillary problems. The paper deals with poverty in Orissa with specific reference to KBK districts. The paper analyses the R.L.T.A.P. Programme implemented in KBK districts as a special area development programme. Special emphasis is being given to these districts so as to achieve a ‘holistic’ development. In spite of these special programmes, poverty still exists in Orissa, in general, and in KBK districts, in particular. The paper analyses poverty and development vis-a-vis economic reforms, under the broader context of fragility.