The government should secure environmental clearance before allocating mining projects for development and production to private players following the model in place for the oil and gas sector, CII president Hari S Bhartia said in the Express Group?s Idea Exchange. This is significant, given the controversy over the government?s recent decision to revoke environmental clearance for Vedanta?s bauxite mining project in Orissa. It is true that there are a lot of similarities in mining of oil and gas and other minerals. However, there are crucial differences in legal and licensing dispensations. While oil and gas is a central subject, licensing authority for mining of ores and bauxite lies with the states. Another difference is that India meets about 80% of its crude oil requirement through import, while the country is rich in deposits of key minerals like iron ores and remains a net exporter.
The government generates a sizeable revenue from the oil and gas sector in the form of petroleum profit as well as royalty payment. But there is no concept of profit sharing in the mining sector. Besides, the central government does not have control over mining of most of the minerals as mining largely remains a state subject. The government has been securing statutory clearances on behalf of companies for acreages awarded to them. The government also secures environmental clearance for UMPPs, which is allocated through competitive bidding.
PFC, the government-nominated nodal agency for conducting bidding for allocation of UMPPs, arranges environmental clearance and also acquires land for the project. The successful bidder reimburses expenditure incurred by PFC. The government has adopted this mechanism because power sector is crucial for development. India cannot maintain its economic growth momentum if it cannot expedite its power generation capacity addition. It is doubtful if the government would give the same priority to the mining sector.
India is increasing its expenditure on infrastructure development. This entails commensurate increase in consumption of steel and non-ferrous metals. India will have to step up its manufacturing capacity of these metals and also ensure easy availability of raw materials if it wants to meet its investment target for the infrastructure sector. That means sooner or later the mining sector would become crucial to the government infrastructure development plan.
?noor.mohd@expressindia.com
