The ministry of mines will propose shares at par for every member of a family in companies whose mining activities displace or affect their livelihood, since its earlier proposal of 26 per cent equity for locals did not find favour with industry.
"The equity part is difficult to implement, so we would go with a proposal of 26 per cent profits to locals from the annual mining activities. Apart from it, we are proposing shares at par to the families so that they can have a voice in the company," a ministry official told HT.
The proposal will be discussed by a group of ministers, headed by Pranab Mukherjee, reviewing the new Mines and Minerals (Development and Regulation) Bill 2010.
The bill, which would replace a 53-year-old law by the same name but with outdated provisions, was to be introduced in the monsoon session. It was put on the backburner because of the nuclear liability bill.
The proposal will only allow locals/tribals to enter the mining company's annual general meeting and vote, but the logic given by the ministry for the marginal shareholding is that it would familiarise the locals with the company's profit and loss activities apart from making them responsible — "much needed support for the industry progress".
The issues of displacement without discontent and local partnership in progress assumed significance after the scrapping of the Vendanta mining project in Orissa. It prompted Congress general secretary Rahul Gandhi to rush to the tribals and pledge his assistance.
"The industry might be apprehensive but it would work to their benefit as the locals would realise any disturbance would hit profit," an official said.
Industry bodies like FICCI, however, are opposed to the share proposals.
Activists have also objected, saying a few hundred shares would not make a difference before lakhs of shares of a company.
"It appears more like a plan to cool tempers. What benefits these shares would bring to locals is a big question. If industry can come in the area, let the locals choose the claims for the losses they suffer," says Ravi Rebbapragada, executive director of Samata, an NGO in Vizag working for tribal rights.