A bill for amending the Mines and Mineral (Development and Regulation) Act has been cleared by the Parliament with an objective to bring in reforms to India’s latent mining industry. Though mining reforms have been the topmost agenda of the Central Government for quite a long time, to realise the complete potential of the sector. Despite the mining sector holds immense importance it has not fully contributed to Indian GDP, foreign investment, and employment. The government came into action for implementation of these reforms after observing the severe economic impacts of the COVID-19 pandemic on the nation.
This article attempts to explain how mining reforms have become essential to ensure India’s economic growth and also throws light on the importance of the mining industry in India. It further elaborates on the reforms that are brought into and discusses a few concerns that have been pointed out over these reforms.
Why does India need mining reforms?
To battle the slowdown in the economy during the ongoing pandemic Indian government in its another endeavour proposed reforms in the mining sector by amending the Mines and Minerals (Development and Regulation) Act of 1957.
According to FICCI, the reforms in the mining industry will not only enhance the employment opportunities in the sector but also, immensely contribute to the GDP of the country and the vision of an Atmanirbhar Bharat.
The industry body also acknowledged the abundance of mineral resources in India out of which a significant portion is yet to be utilised. It also stated that the availability of mineral resources would play a vital role in securing the vision of ‘Atmanirbhar Bharat’ and achieving a $5 trillion economy. It will also ensure ease of business for the mining industry and simplify processes.
The amendment notes also laid an emphasis on changes in the mining law because these reforms will help in continuing the validity of all the valid rights, approvals, clearances, licences till exhaustion of mineable reserves in the mine.
● What are the new changes brought up?
The proposed reforms include the amendment of two provisions in the MMDR Act,1957 that would auction over 500 mineral mines that were rendered inaccessible by the prevailing regulatory frameworks. Under the existing legislation, these potential leases have either surpassed the timeframe in which a mining lease could be granted legally or cannot be reallocated at auction due to legislative red tape.
Also, there is a proposal to provide a better and more specific statutory definition of illegal mining. Previously, the mining legislation in India did not differentiate between illegal mining done outside a leasehold area and mining done that violates approvals and clearances within a mining lease area. The proposed amendments will only allow illegal mining committed outside a lease area and prohibit mining that violates regulations within an otherwise permitted lease area.
Further, the ministry of mines has also proposed the allowance of captive mines holders to sell up to 50% of the minerals excavated during the current year. This will help in increasing the production of coal from the captive mines and the availability of coal in the market that will reduce the import of coal leading to Atmanirbhar Bharat (self-reliant India) as coal is a vital resource for several core sector industries.
● Concerns over the reforms
The reforms have been severely criticised by environmentalists and people who are working for mining-affected communities. They also opined that it is complete injustice with the communities residing near these mining areas if certain conditions of a mining area change after mining operations for few years, then such concerns must also be taken into consideration. Several instances have taken place where mining activities led to a severe increase in air and water pollution affecting the mining communities living around these mining areas.
● Are the proposed reforms against the state governments?
The Central Government has taken up powers to have control over the auction of minerals wherever the state government would face challenges to conducting such auctions. According to Environmental lawyer Rahul Choudhary, auctioning of mines without taking any consent of the states, is taking away the ownership of these state governments over the mines. He stated that due to the State Government's larger role in auctioning of the mines, the powers are conferred on the states but by taking control over the auctions under the proposed reforms, the Central Government is imposing its will on the states which cannot be done as it is a hindrance to the federal spirit of the nation.
Overall, the mining reforms can be described as the latest attempt by the Indian government to give a push to India’s economy during the pandemic wherein there is a dire need to revive the Indian economy. These reforms have brought up several changes and amendments in the previous mining statute like giving a crystal-clear statutory definition of illegal mining and allowing captive miners to sell up to 50 per cent of the minerals excavated. Though these proposed amendments have also raised few concerns like violating the interests of the communities residing near these mining areas, the overall implications after the implementation of these reforms are yet to be observed.