An exercise at reform'

BIJOY KRISHNA HANDIQUE, Union Minister of Mines and Development of North Eastern Region (DoNER), says he is of the firm view that the Indian mining sector requires some cleaning up and course correction. To facilitate that, he has undertaken the task of drafting the new Mines and Minerals (Development and Regulation) Bill and pushing it within the United Progressive Alliance (UPA) government and through Parliament. I knew right from the beginning that this would not be an easy job. But we have made a beginning, we have travelled some distance and we hope to complete it in good time, he told Frontline in an interview. Excerpts:

As the Minister of Mines for the past one year how do you analyse the sector as a whole, and what are the changes you want to bring about?

There are a lot of changes we want to bring about and at different levels. At the centre of all this is the change in the policy framework of the Ministry itself. A lot many cosmetic changes were attempted in the past. We analysed all these and came to the conclusion that only new legislation can address the new issues and challenges. And we went about that process with utmost seriousness. We had consultations at various levels; eight or nine rounds of consultation. Ultimately, we formulated the draft Bill and circulated it for the opinion of other Ministries. We are still getting responses and the debate is on. A Group of Ministers [GoM] has been formed and the Prime Minister's Office [PMO] is also keeping track of the process.

Could you explain the new issues and the challenges.

Central to the thinking on this are the 2005 Anwarul Hoda Committee's recommendations. The committee analysed how the mining sector's dimensions have changed over the years and how technology and investment have become key to its overall development.

As an industry, mining needs fresh induction of capital and new technology. To attract capital and technology we have to bring in certain reforms. So, this is an exercise at reform and is aimed basically at seeing how to enhance investment, how to push up business confidence.

With this objective in mind, several clauses have been included in the [new] MMDR Bill, which facilitate transparency in the allotment of mineral concessions [MC], reduction of delays in the issuing of the MC, assured right to the next stage of MC for the prospectors, and transferability of the MC. Prospecting is a costly operation. So, in order to build investment there has to be measures to boost the confidence of the investor.

All these proposed changes have invited criticism that the new MMDR is loaded heavily in favour of the private sector and towards protecting and promoting the interests of the mining corporates.

See, mining has always been in the private sector. There are people who advocate nationalisation of mines, but after sixty-three years of independence that does not seem to be a practical proposal. What is required is sustainable development of mines and sustainable development of the mining areas.

The thrust of the revised MMDR is towards that. It stipulates compulsory consultation with the gram sabhas and district panchayats in the tribal areas before the notification of an area for grant of concessions and makes it necessary to include employment and skill enhancement of the local population in the resettlement and rehabilitation package.

Over and above this, the draft Bill suggests assured annuity and equity to the local population, as also a percentage of the profits earned by the miner. These type of practices aimed at sustainable development are there all over the world and our effort is to take the best principles from the global experience.

What exactly will be the mechanism to give equity to the local population? There is widespread apprehension that a viable structure may not be found at all.

We will come to the question of mechanism and structure at the appropriate time. The most important thing now is to move the Bill through all the appropriate forums and get it passed. What you have to see is that our emphasis on local development and involvement of the local population is relevant in many ways. It will also help bring down illegal mining. The new MMDR Bill proposes to prohibit for life anybody found to be involved in illegal mining. The said miner's existing licences will also be cancelled. Fifty special courts are being set up to speed up the judicial process in such cases.

But the experience across the country has been that a miner with muscle power can block all complaints against illegal mining. It is said that nobody may come forward to file a compliant against powerful miners.

This is not entirely true. Empower the people properly and they will respond. There are people who have complained against illegal miners across the country. Still, there is a huge quantum of illegal mining in the country. The new Bill will certainly help State governments to move against that because it seeks to empower the local population.

In spite of the professed positive dimensions of the new Bill, some sections of the Central government itself, including the Ministry of Steel, are opposed to it. In fact, it is evident that there is a running battle between your department and the Ministry of Steel on key provisions of the Bill.

These things come up in the course of democratic governance. Discourse is certainly a part of it. That is exactly why we have a GoM to go into the nitty-gritty of the Bill and evaluate it from all sides. The Ministry of Steel has its reservations and we have our standpoint. The discourse within the Ministry and later in Parliament and the Standing Committee should ensure a Bill that is in the best interests of the country.

Mining is also considered to be one of the most corrupt sectors of the economy. What steps does the Ministry plan to take to address this?

That is a totally one-sided perception. There is corruption all right, but that is there in all sectors. The scale may be a little higher because of the general scale of operations.

There is a view that the concessions being accorded to big mining companies and the exploitation of mining areas in the tribal regions by these companies have led to the rise of extremist forces such as the Maoists.

That is an argument that one needs to address carefully. It is true that the Maoists have concentrated in areas where exploitation occurs in one form or the other. That was their pattern in earlier times too. But mining alone is not responsible for their growth. The lack of overall development in these areas has contributed to it. That is why the new MMDR Bill seeks to build a sense of ownership in the local population about the mines.