UPA misses opportunity to pass landmark mining Bill

Mining and Minerals (Development and Regulation) Bill set to lapse. Passing it would have led to distribution of mining profits to the tune of Rs 9,000 crore among 50 mineral-rich districts

By Anupam Chakravartty
Published: Friday 07 February 2014


When the Congress-led United Progressive Alliance came to power for the second term in 2009, passing the Mines and Minerals (Development and Regulation) or MMDR Bill was a top priority for it. The Bill which was to replace the existing MMDR Act was termed historic because it proposed sharing of mining profits with tribal and other local communities. However, the Bill is not among the Bills the UPA government has proposed for tabling in the ongoing session of Parliament, which will be the last session of the 15th Lok Sabha.

According to Union Minister for Mines, Dinsha Patel, the government was not in a position to place the Bill before Parliament for its approval in the ongoing winter session since there were 39 other Bills which the government wanted to pass in the final session before elections are held. The MMDR Bill, introduced in 2011, sought to replace MMDR Act of 1957, which could have acted as a deterrent for illegal mining while ensuring that profits from mining are equitably distributed among communities displaced or impacted by mines. “We are not in a position to table it in the 15th session of Lok Sabha because there is no certainty that the listed 39 Bills would get taken up,’’ said Patel.

Changes recommended in Bill provisions

After the Bill was introduced in Lok Sabha, it was referred to the parliamentary standing committee on coal and steel, headed by Trinamool Congress member of Parliament, Kalyan Banerjee, following objections from mining and metals companies and industry organisations such as Federation of Indian Chambers of Commerce and Industry (FICCI). The parliamentary panel suggested as many as 107 changes in the Bill and if all of them are accepted, the shape of MMDR Bill would have completely changed, said Patel. “Of the 107, there are 25 suggestions, which we can accept,’’ he added.

Among the key provisions, the Bill sought that coal and lignite mining firms would have to share 26 per cent of the profits from their mines with project-affected persons. The parliamentary panel, however, recommended a royalty-based payment system.

For non-coal and non-lignite mining firms, the Bill proposed payment of an amount equivalent to royalty paid by the firms to the state government. This recommendation was accepted by the Parliamentary panel. The Bill proposed that the collected money could be used for welfare of the project-affected persons through a newly created district mineral foundation (DMF). In order to check corruption at the district level, the parliamentary panel had also recommended bringing DMF under the purview of the Comptroller & Auditor General (CAG). It also recommended that the local community's representation in the DMF council should be increased.

Poor people in rich districts

The decision of the UPA government not to take up the Bill in this final session means that it will lapse. The new government that comes to power in the 16th Lok Sabha will have to initiate the entire process of introducing and passing the Bill all over again.  

According to a survey report prepared by Delhi-based non-profit, Centre for Science and Environment, there are 50 mining districts in India which generate more than 85 per cent minerals of the country. These districts share 50 per cent of the total mines lease area. “Around 2.5 million people have been affected in these areas and average poverty in these districts is higher than in any other parts of the country,” says the CSE report. If the proposed bill is implemented then these districts could have got more than Rs 9,000 crore, the report states.

The Justice M B Shah Commission report which estimated scam relating to illegal mining of iron ore in Odisha alone at Rs 60,000 crore arrived at another interesting figure. The Commission found that if the super-normal profits earned by the mining companies were shared with the correct legislation in place, each family in tribal regions such as Keonjhar district or Sundargarh would have received over Rs 9 lakh.

While, the ruling UPA government is not ready to take the blame for the lapse in passing the MMDR Bill, the opposition BJP blamed the Congress government for blocking it. BJP MP and parliamentary standing committee member, Hansraj Ahir, issued a statement, saying his party will raise the issue in the ongoing session of the Parliament. “The UPA wants to lease out precious minerals. This is going to be a scam as happened in the coal block allotment. The standing committee had more than 20 sittings on this Bill and we made it stronger after talking to a lot of stakeholders. We will take up the matter in Parliament,” said Ahir.

Report of Justice M B Shah Commission of enquiry for illegal mining of iron ore and manganese in the state of Odisha

Memorandum of Action Taken on the Justice M B Shah Commission Of Inquiry on illegal mining in the state of Odisha

The Mines and Minerals (Development & Regulation) Bill, 2011: Standing Committee on Coal and Steel (2012-2013)

The Mines and Minerals (Development and Regulation) Bill, 2011

Supplementary note for the Group of Ministers on Mines and Minerals (Development and Regulation) Bill, 2011

India’s mining regulation: a chance to correct course

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.