It is important to ensure that the private sector becomes the main source of funding exploration and R&D
Over the years, the budget speech of the Finance Minister in the Lok Sabha, rather than the President’s address to both the Houses of Parliament, has become the focus of attention of all those interested in understanding government’s plans and programmes for the coming year. Expectations need to be attuned to the Budget speech in the context of sum total of the government’s plans, programmes and underlying vision, perhaps informed by NITI Aayog’s Vision and Strategic Plan. Illustratively, one can apply this in the case of mining sector, which has fortuitously just brought out a new Draft Mineral Policy to replace the National Mineral Policy 2008, which relates to the non-coal mineral sector. The draft policy attempts to contextualise the approach according to the “Make in India” and “ease of doing business” initiatives of the government.
The “Make in India” initiative makes it necessary that the pace and range of production from mines is increased. Not only must our mines produce enough iron ore and bauxite for making steel and aluminum used in manufacturing and infrastructure but also copper, nickel, tin and other non-ferrous metals and gallium, germanium, tellurium, rare earths and other new-age metals needed to manufacture sophisticated and hi-tech equipment and machinery. This means, we must explore more intensively.
To do that, we need to ramp up our geoscientific surveys to produce high quality geological, geophysical and geochemical data. It is essential that the budgetary outlays of the Geological Survey of India are commensurate with the need. Equally important is to ensure that the private sector becomes the main source of funding exploration and R&D, considering the high risk (despite all the geoscientific survey data) involved in locating minerals deep below the surface of the earth and in extracting them from the mineral ores.
“Ease of doing business” means comprehensive, scientific and efficient regulation of the sector. Minerals are the property of the States, yet, currently, it is the Indian Bureau of Mines (IBM) that is functioning as the sectoral regulator. The misalignment and capacity shortcomings of regulatory systems and lack of layered accountability was the main reason for rampant illegal mining and other systemic failures in the past. It also contributes to inefficiency and waste in mining-related processes. It is essential that either the IBM is properly equipped for the purpose of enforcing mining plans and mine closure, or the State Directorates of Mining are appropriately capacitated. This is a fundamental responsibility of the government, and budgetary resources must be found for the task.
The draft policy rightly brings out the importance of mining within a “Sustainable Development Framework (SDF)”. Indeed, the SDF for the sector already exists, but it needs substantial investment to develop the capacity for mining within the framework and also to manage regional impacts. Currently, there is no initiative or policy which attempts to meet this aspiration which is clearly multi-disciplinary on the one hand and cross-sectoral in its implications on the other.
The budget of the Ministry of Mines is quite modest. The budget of the GSI, an attached office of the Ministry, is annually about Rs 800 crore. Similarly, the budget of the IBM is to the tune of Rs 100 crore. However, this does not adequately reflect the fact that the annual mineral production of the country is about Rs 2.5 lakh crore, of which fuel minerals (coal and lignite) account for about 66 per cent; metallic minerals about 19 per cent and non-metallic and minor minerals about 15 per cent. Ensuring “ease of doing business” with a view to “Make in India” has enormous socio-economic as well as environmental implications.
The issue is not one merely of raising budgetary outlays; the real issues are structural and institutional, which are to be brought in alignment with global best practices. Fortunately, as part of the budgetary process, the department-related Parliamentary Standing Committees examine the Demand for Grants of the Ministries and lay their reports in the Parliament. Perhaps, along with the Budget speech, attention is needed to the recommendations of these committees which deepen and broaden the impact of the speech.
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