Mining ban hurting exports and economy, says Sharma

Written by PTI | New Delhi | Updated: Dec 26 2013, 10:28am hrs
The ban on mining by the Supreme Court has hit the economy and exports, and increased India's dependence on imported coal, said commerce and industry minister Anand Sharma.

It (mining ban) has hurt our economy. It has hurt exports, (particularly) iron ore exports. It has increased our dependence on coal imports. So, both ways, we are losers, commerce and industry minister Anand Sharma stated.

But for the ban on mining, he said, India could have earned by exporting around 100 million tonne of iron ore.

We have been deprived of the precious foreign exchange and what we could have mined in India. When it comes to coal, $22 billion plus was the coal import bill, the minister said, adding: "these are the areas which need a serious look.

The Supreme Court had banned iron ore mining in Karnataka in July-August 2011 and in Goa in October 2012.

Earlier, Sharma has raised concerns over judicial activism and said: India badly needs judicial reforms.

Following the ban, shipments of iron ore plunged to 18 million tonne in 2012-13 from nearly 168 million tonne in 2010-11. Before the ban, India was exporting iron ore worth over $7 billion.

As regards coal, the environmental restrictions have significantly hampered production in the country, leading to an increase in dependence on imports.

The slowdown in exports has increased the trade deficit as well as the current account deficit. While the trade deficit soared to a record high of $191 billion in 2012-13, CAD jumped to $88.2 billion, or 4.8% of the GDP, during the period.

The mining sector, with a weight of about 14% in the Index of Industrial Production (IIP), saw a contraction of 3.5% in October as against a dip of 0.2% in the same month last fiscal.

During April-October, the output shrank by 2.7% as against a contraction of 1%.

Coal production, with a weight of about 4.5% in the IIP, declined by 3.9 % in October.