Value of new investment projects announced in the mining sector fell by a sharp 78% on year to Rs 4,174 crore in FY24, reports Saikat Neogi. This was also the lowest level of such investment proposals at current prices at least since 1995-96, going by the data from the Centre for Monitoring of Indian Economy.
In real terms, the value could be one of the historical lows, if not the lowest since Independence. Though this would seem to imply that a series of reforms undertaken over the last few years to promote investments in the fuel and non-fuel mineral segments hasn’t been fruitful, that may, however, not be the case.
“Investment projects completed” jumped 266% on year to Rs 59,390 core in FY24, indicating that projects stuck for long have been completed at a brisk pace. The fast-tracking of project implementation also boosted the gross value added in “mining and quarrying” sector, and it registered 7.1% growth last fiscal, quite strong by the historical standards of the sector. The Index of industrial production also showed heightened activities in the sector last year, with a 7.5% year-on-year rise.
However, the strong growth continued to be mainly driven by surficial minerals like iron ore and limestone, with not much progress in other segments like base metals and other deep-seated items. Wednesday’s Supreme Court ruling upholding the power of states to levy tax on mineral rights and mineral-bearing land, and letting them seek refund of royalty from April 1, 2005 onwards, could be a dampener for the potential investors in the highly-taxed sector.
