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: Two new corruption cases from Jharkhand exemplify how India’s mineral riches are being mishandled even as their demand—both global and domestic—is booming. While the Enforcement Directorate and the Income Tax department conducted countrywide raids on independent MP and former CM Madhu Koda’s premises, the Serious Fraud Investigation Office began an inquiry into irregularities at Sesa Goa—India’s biggest iron ore exporter. While Koda stands accused—among other things—of accepting bribes to award mining leases, Sesa Goa is being investigated for financial irregularities—reportedly including “over-invoicing” and “under-invoicing”. As one of our columnists today points out on the next page, one implication of all this is that, given India’s economic growth is contingent upon the growth of its steel industry, market distortions are a growth dampener. It’s not just Jharkhand; corruption reports are coming in from across the country. Orissa has been recently rocked by the case of Ram Bahadur Thakur Ltd illegally excavating Rs 120 crore of manganese ore. Even in the Karnataka judge PD Dinakaran’s disproportionate assets case, one accusation is that he manipulated cases of illegal mining. The obvious, shared cause of such an array of malpractices is a moribund mining policy, which just hasn’t kept up with market-led development. And the producers who climb mineral mountains on political crutches are apt to continue being dodgy in other ways.
So, this winter session, there is much being expected of the Bill to replace the Mines and Minerals Development Regulation Act, 1957. For example, while a coal ministry screening committee currently allots coal blocks for captive use, the new Act is expected to replace this process with transparent, competitive bidding. This should be good both for government coffers and consuming industries, helping them meet their production targets more efficiently. It’s also expected that the new legislation will cut down the time and procedures involved in getting new mining leases, which should, in turn, unlock greater private and overseas investment. The ambition is to double mining’s contribution to the economy to at least 4%, in five years. Of course, there is an elephant in the room. The Maoists have, after all, stalled investments that have already been announced, including big ticket ones from ArcelorMittal and Posco. As per the steel ministry, $82 billion worth of projects are being held up by land acquisition and environmental clearance delays. And as this year’s many attacks on Essar Steel, Nalco and other industry players’ resources show, this...
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