Sweeping changes in mining policy
After releasing a much hyped mineral policy last year that failed to see the light of day, the government is back to the drawing board again, reports Sumant Banerji.business Updated: Jul 14, 2009 21:53 IST
After releasing a much hyped mineral policy last year that failed to see the light of day, the government is back to the drawing board again. On the anvil is a refurbished policy that would give specific directions on controversial aspects like royalty, mining leases and even mineral exports. The policy is likely to be tabled in the winter session of Parliament.
“The mining landscape needs an overhaul and this is the time to do it,” said a senior official in the mines ministry. “The new mineral policy was indicative but not comprehensive on a lot of issues and we have decided to address such issues. We want the big ticket investments to stay and not move away due to further delays.”
Mining is one of the sectors that is worst affected by procedures and red tapism that has resulted in delays for some of the country’s largest FDI projects like Korean steel major Posco’s 12 million tonne steel plant in Orissa and ArcelorMittal’s twin projects in Jharkhand and Orissa.
The new policy, after it takes shape, is expected to more than treble the investment in the sector from Rs 18,000 crore to over Rs 60,000 crore in the next 5 years.
Another significant step would be adoption of advalorem principal for charging royalty which will create a windfall for states. Accruals for major mineral producing states is likely to increase from Rs 2,014 crore in 2006-07 to Rs 3,943 crore in 2010-11 through this.