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.
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 Handique, who has been replaced by Dinsha Patel as the new mines minister in the cabinet reshuffle in January, had also agreed to the change.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.”