task of allocation (licensing).
Under the Seventh Schedule of the Constitution, management of mineral resources vests with both the Centre and state governments but its says that regulation and development of minerals would be the states’ job, except to the extent that Parliament, by law, makes a specific provision. The question of development and regulation is distinct from that of ownership. Ownership of minerals (except offshore minerals) is also with the states and in all cases, the licensing and leasing power is with the states only.
The question is whether the Coal Mines Nationalisation Act or the MMDR Act has been changed to give the Centre power to “allocate” coal blocks. The SC doesn’t think they have.
However, there is no assurance that states will be able to allocate coal blocks in a better way than the Centre given the mining controversy in states like Karnataka, feel experts. What is required is a transparent process, they reckon. “Whether it (allocation) is to be done at state or central level, the zone of discretion should be minimised,” said RV Shahi, a former Union power secretary. If the allocation power is given to states for coal blocks, each coal-bearing state will have to set up its own screening committee for selection of allocatees, in a reversal of the current practice where this responsibility lies within the Centre’s purview and is performed through a national-level committee. This is at a time the Centre is trying to introduce a number of players in the field of coal mining through a somewhat liberal captive coal policy (even as privatisation of commercial coal mining remains a pipe dream). So if the states start allocating coal blocks, the Centre’s ability to manoeuvre the policy space would be constrained.
As for non-coal minerals (such as iron on ore, bauxite, limestone, base metals like lead, noble metals like gold and the rare earth elements), the Centre’s thinking as reflected in the MMDR Bill with the parliamentary standing committee is that auction is the right way for allocation of fully prospected deposits, but extending auctions to other cases indiscriminately might disincentivise exploration.