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Coal, mines bills: Good step, but a lot left to do

It was a victory for the Narendra Modi government to have got both the coal and the mines and mineral Bills passed in the Rajya Sabha last week, isolating the Congress and the Left. A lot hinged on the passing of these Bills as far as India’s ability to undertake reforms was concerned. So the passage of the insurance Bill, along with these two, means that a few more hurdles are removed for investors, both foreign and domestic. There is a lot of euphoria and hope this will usher in an era of transparency, efficiency and competition in the coal and mining sectors. It will also permit the private sector to mine coal and sell it commercially, ending the 40-year monopoly of Coal India. So far, only companies in power, steel and cement sectors could run captive mines for their own use. The coal and mining/minerals sectors were mired in scams, and the Supreme Court had last year cancelled 204 of 218 coal blocks on the grounds that the allotments were done illegally. The next round of coal auctions can also resume as planned in April.  This will increase coal availability, as it is estimated the 110 blocks that will be auctioned have reserves of around 350 million tonnes, of which 90 million tonnes may be operationable. The states are happy as they will get more revenue from auctioning iron ore, limestone and bauxite mines. Iron ore mining had come to a halt, creating huge problems for exporters and also resulting in unemployment. However, having considered all the advantages, some of the issues ahead can’t be ignored. The passing of the Bills resolve only a part of the problem. It may be recalled that only 80 of 218 coal blocks allocated by the Manmohan Singh government were operational on the ground. The rest were reportedly held up due to the absence of and delays in environment and forest clearances. Most of the mining areas are in dense forest areas inhabited by tribals, many of them in Maoist-dominated areas. This means unimaginable social tensions and more fodder for the growth of the Maoists.

While the Centre may be generous in giving clearances, ultimately it is industry and state governments that are responsible for acquisition of mining lands. This is easier said than done. While the crucial land acquisition Bill is yet to be passed, the Modi government has made land acquisition less cumbersome. This is anathema to land holders, namely farmers and tribals, and to Opposition parties that have been vociferously opposing the land Bill. So while passage of the coal and minerals and mining Bills is good for investors and for ease of doing business, its social fallout is yet to be determined.

source: http://www.asianage.com