It is the right time to have mining revolution, according to Anil Agarwal, chairman of the US $ 18 billion Vedanta Group, whose iron ore division in Goa is the largest player in the state mining industry. The mining mogul is one of the most vocal advocates for restart of the mining activities in the state.
His suggestion is for reforms in the metals and mineral sector through several policy changes by the new government.
The Prime Minister, Narendra Modi’s emphatic victory for the NDA in the 2019 elections shows the pro incumbency mood of the nation. The voters have endorsed Modi’s decisive leadership, his government’s multiple schemes like electricity, cooking gas, bank accounts and free health services. And above all his ability to run a clean government and ensure that every single rupee reaches only the beneficiary.
That said, the government will now re-ignite its reforms agenda to push growth, tackle critical issues like creating even more jobs, usher in more tax friendly laws, strengthen India’s position in global trade while protecting domestic industry from dumping and create more conducive environment to attract FDI in critical segments like mining and oil & gas.
Given India’s rich and diverse geology, it is the right time for the country to have a mining revolution. The sector has the potential to take its contribution to overall GDP from the current two per cent to 10 per cent, plug imports of non-essential metals and minerals, and generate millions of new jobs.
India’s goal to bring down its crude oil imports by 10 per cent by 2022 will be achieved as policies and legislation are becoming conducive to ensuring greater investment in the natural resources sector to make the country self-sufficient and take away its dependency on imports.
Domestic crude oil attracts a high cess rate of 20 per cent. Ironically, imported crude oil is not even taxed. If the cess rate on domestic crude is reduced to eight per cent it will provide an incentive to the industry to produce more, reduce imports, save forex and encourage more companies to enter the O&G landscape.
Urbanisation and infrastructure development will continue to generate demand for natural resources, including commodities where our company is a leading producer. Such is the scale of the nation’s needs that we believe that in times to come, everything that we find in India will sell in India.
Our country has similar geology such as Brazil and Australia, where natural gas sector contributes 8-10 per cent of the GDP. However in India, the sector contributes only around two per cent. The new government had realized the importance of manufacturing natural resources and their intentions were tremendous from day one. They have created the right policy and right framework and that will be beneficent and supportive towards business.
Having said that, there is still room for simplification in policies such as giving the power of public decision making in the hand of collector and making them the business development manager. I still believe that “Find in India” is a possibility, considering the rapid growth in innovation and technology today, as well as the money available we can definitely take this initiative forward.
The government’s involvement in a fundamental sector such as natural resources will require way more effort in order to overcome some of the challenges. What if we can’t go to the border to fight like a soldier, but we can produce 50 per cent of India’s oil and most of mineral and metals to make India self-sufficient in natural resources. We can serve the nation in many different ways.
The recently approved National Mineral Policy (NMP) will ensure more effective regulation. It is expected to lead to sustainable mining sector development in future while addressing the issues of project affected persons especially those residing in tribal areas. Growth in mining will give rise to employment opportunities in both government and private sector companies across multiple roles.
The NMP 2019 aims to attract private investment through incentives while the efforts would be made to maintain a database of mineral resources and tenements under mining tenement systems. However, it will bear fruit once necessary amendments in the MMDR Act and EC/FC Procedures are carried out, which will lead to huge investments and employment generation in the resources sector.
Global players should be given strong incentives to set up and invest in exploration and production of natural resources: mining of minerals and metals. Thousands of small and medium enterprises will emerge to process these raw materials, benefitting our country immensely
And lastly a Regulatory and Development authority for mining industry should be instituted, which can regulate, promote and ensure orderly growth of the industry, similar to IRDAI.
Problems like illegal mining, environment, sustainability; ambiguity in policy etc. can be sorted out sooner and more efficiently if a dedicated authority is operational.