26% profit sharing with locals in mining bill may be scrapped

In what could mean poor in the rich mining belt of India getting less benefit, the government is considering diluting the provision in the proposed Mines and Minerals Development Bill on sharing 26% of the net profit of a mining company with locals for sustainable livelihood.

Updated on: Mar 7, 2011, 21:44:02 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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In what could mean poor in the rich mining belt of India getting less benefit, the government is considering diluting the provision in the proposed Mines and Minerals Development Bill on sharing 26% of the net profit of a mining company with locals for sustainable livelihood.

Instead of sharing the net profit, the mines ministry is likely to propose to a Group of Ministers headed by Finance Minister Pranab Mukerjee that 26% of the royalty on mines should be provided to locals, who lose their land or property because of a mining activity.

The new law was aimed at making mining an inclusive development process with locals benefiting from the profits of a mining company.

Industry bodies such as Confederation of Indian Industry (CII) and Federation of Indian Chambers of Indian Chambers of Commerce and Industry (FICCI) had opposed the provision terming it anti-mining industry.

Even the Planning Commission had opposed it and had instead suggested that sharing of benefits should be linked to royalty and not net profit.

“The change was agreed at a meeting between Finance Minister Pranab Mukerjee, Planning Commission Deputy chairperson Montek Singh Ahluwalia and the then Mines minister B K Handique,” a senior government official said. Handique, who has been replaced by Dinsha Patel as the new mines minister in the cabinet reshuffle in January, had also agreed to the change. “The final decision will be taken at the GoM meeting to be held later this month.’

According to government officials, the dilution, if approved by the GoM, would mean that the poor in the mining areas would get maximum of Rs 4,000 crore from the mining companies during lease period of about 30 years.

The provision of sharing 26% of net profit would have meant that tribals would have got almost Rs 30,000 crore for the lease period.

The move has already irked some Sonia Gandhi headed National Advisory Council members, who want to consider the proposed bill before it is introduced in the Parliament.

“The move is anti-tribal and poor,” said a NAC member, who was not willing to be quoted, as he wants to raise the issue at the next council meeting.

“If the benefit sharing is linked with royalty the poor in rich mining areas will get peanuts from the mining companies.”

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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