India’s mining sector is at an inflexion point and facing unemployment issues.
The full potential of mining sector need to be utilized to resolve such issues.
What are the potentials of Indian mining sector?
India has abundant coal reserves, of 300 billion tonnes, there is room for exports.
With greater development of India’s natural resources sector, import dependency can be reduced by more than 50%.
This has a potential to save $100 billion which in turn would create more than 20 million jobs.
The vibrantmining sector can also create an entire eco-system of SMEs.
What are the concerns in Indian mining industry?
The import of natural resources makes up for $200 billion, or over 50%, of India’s total import bill of $400 billion.
Only 10% of area with mining potential has been explored in India, against 95% in Australia.
The contribution of India’s mining sector to its GDP is just 2%, while it could contribute as much as 10%.
The taxes and royalty on mining in India are one of the highest in the world.
Currently, despite 100% FDI being allowed under the automatic route inflows into the sector are not encouraging, and account for less than 0.5% of the total inflows to the country.
The Mines and Minerals Development and Regulation (MMDR) Act, has a major lacunae in its current form, wherein mines can be auctioned by state governments only after exploration.
Recently SC ordered to shut coal mining activities in Goa due to environmental violations and inadequate policy measures. Click here to know more
What measures needs to be taken?
India must increase mining activities on a massive scale, may be up to five times from the current production.
This requires transparent policies and reduction in royalties to attract firms to invest, explore and produce.
Governmentneed to direct competent authorities to conduct environment impact studies of existing mines, and chalk out a plan for course correction.
While union government takes concrete steps to encourage private investment in the mining and other sectors, it must also ensure protection of domestic industry from dumping via imports.
Respective governments need to take measures for revoking the ban on coal mining and work to find a viable solution.
