The government is mulling over changes in the legal framework that would facilitate foreign direct investment (fdi) in the mineral sector.
In the third week of November, the mines ministry held its quarterly performance review meeting. There, Planning Commission member N K Singh directed the ministry to find out why actual fdi in this sector was lower than the approvals. The meeting was attended by officials from the mines ministry and the Plan panel. The ministry has been asked to take appropriate legal measures, if found necessary, to redress the problem.
The move echoes the 10th Plan (2002-07) stance, where it is mentioned that "private sector investment, including fdi, will have to be encouraged for detailed exploration."At the meeting, the Plan panel also asked the ministry to explore the possibility of domestic companies investing overseas and of establishing smelters abroad.
According to the Plan panel, the major reasons for low private, especially foreign, investment in the mineral sector are the procedural delays at the state level and lack of regulatory mechanisms. The panel felt that a host of legislation related to forests, environment, mining and labour needed to be harmonised for speedier growth of the private sector in mining.
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