META­MOR­PHO­SIS OF MIN­ING POL­ICY

Down to Earth - - EDITOR’S PAGE -

Ta science and art of pol­icy-mak­ing. In In­dia, this HERE IS is con­found­ing and ab­stract. But what stands out is that the in­tent and form of pol­icy-mak­ing be­gins some­where and ends some­where else—as it moves be­tween desks, com­pet­ing in­ter­ests and even gov­ern­ments, it evolves or gets dis­torted so that the fi­nal prod­uct looks very dif­fer­ent. But that is not the end of the mat­ter. By the time a pol­icy is de­creed into law, the orig­i­nal pro­po­nents be­come cyn­i­cal or lose in­ter­est in its im­ple­men­ta­tion. Pol­icy then be­comes dead on ar­rival. Let me ex­plain why I am say­ing this. In the mid-2000, min­ing was the sun­shine sec­tor. In­dia was dig­ging for min­er­als like there was no to­mor­row.The gov­ern­ment set up a com­mit­tee un­der the then mem­ber of the Plan­ning Com­mis­sion, An­warul Hoda, to sug­gest changes in the min­ing pol­icy. This was also the time when we at the Cen­tre for Science and En­vi­ron­ment (cse) were re­search­ing this sec­tor. The Hoda com­mit­tee fo­cused pri­mar­ily on min­eral ex­trac­tion. Our fo­cus was the in­ter­con­nec­tion be­tween min­eral wealth, forests and wa­ter—also found where min­er­als are found—and the fact that peo­ple who lived in these rich lands were the coun­try’s poor­est.

In 2007, another com­mit­tee was formed, this time un­der the then home min­is­ter Shivraj Patil to ex­am­ine the Hoda re­port rec­om­men­da­tions. We pushed our way into this com­mit­tee, mak­ing a pre­sen­ta­tion on the need to re­form the 1957 Mines and Min­er­als (De­vel­op­ment and Reg­u­la­tion) Act, or mmdr Act, to ac­count for en­vi­ron­men­tal safe­guards and share rev­enues with lo­cal peo­ple.

Then in 2009, the Union Min­istry of Mines, headed by an ex­tra­or­di­nary bu­reau­crat, be­gan rewrit­ing the 1957 law. The first draft of the re­vised mmdr Act de­cided to make peo­ple part­ners in min­ing oper­a­tions by giv­ing them eq­uity in min­ing com­pa­nies. But the very idea of shar­ing ben­e­fits with peo­ple was too much for min­ing com­pa­nies.The Fed­er­a­tion of In­dian Min­eral In­dus­tries went as far to say that if money was given then “tribal men would drink and beat their wives”.

But bet­ter sense pre­vailed. It was de­cided that in­stead of eq­uity, com­pa­nies would give 26 per cent of their prof­its, which would be chan­nelised di­rectly into the ac­counts of the af­fected peo­ple.As I said, pol­icy-mak­ing in In­dia is con­found­ing, so meet­ing af­ter meet­ing was held to evolve con­sen­sus and each time it was an ef­fort to keep the ben­e­fit-shar­ing pro­vi­sion in­tact.

By the time mmdr Bill, 2011, was tabled in Par­lia­ment, the orig­i­nal idea re­mained but in a dif­fer­ent form. In­stead of shar­ing prof­its, it was de­cided that min­ing com­pa­nies other than coal would give equiv­a­lent roy­alty to the dis­trict min­eral foun­da­tion; coal would give 26 per cent of the prof­its af­ter tax.The law made it clear that this money was to go to the af­fected peo­ple. How­ever, upa ii did not push for this bill and af­ter two years as Par­lia­ment dis­solved it lapsed.

The new nda gov­ern­ment in­stead of rewrit­ing the 1957 Act, brought in an amend­ment, mostly to move to auc­tion of mines for greater rev­enue and trans­parency in al­lo­ca­tion. In this amend­ment, now passed by Par­lia­ment, the pro­vi­sion on ben­e­fit shar­ing re­mains, but it has lost its in­tent. Now the dis­trict min­eral foun­da­tion (dmf ) is to be set up in all ar­eas “af­fected by min­ing re­lated oper­a­tions”. Hold­ers of min­ing leases will pay to the foun­da­tion of the dis­trict in which min­ing is done a sum, “which will not ex­ceed one-third of the roy­alty” in the case of new leases and “equiv­a­lent to the roy­alty” in case of old leases.The amend­ment lets state gov­ern­ments set the rules for the foun­da­tion, in­clud­ing its com­po­si­tion. But it does say that the ob­ject of this foun­da­tion will be to work for the “in­ter­ests and ben­e­fits of per­sons and ar­eas af­fected by min­ing re­lated oper­a­tions.”

My col­leagues have cal­cu­lated that dmfs in big min­ing dis­tricts will get sub­stan­tial in­flows of funds. At cur­rent roy­alty rates dis­tricts like Keon­jhar would get some ` 600 crore an­nu­ally.It is pos­si­ble to use this money for the di­rect ben­e­fit of the af­fected peo­ple as well as to in­vest in their fu­ture as­sets. Now the ques­tion is who will make the rules to en­sure that the money reaches where it be­longs?

By now the orig­i­nal pro­posal is long gone. How­ever, in this case, cse as the pro­po­nent of the idea re­mains. The first draft of dmf rules, from Ra­jasthan, fo­cuses on the use of money. It has no idea that this pro­vi­sion was meant to give peo­ple a stake in the rent on nat­u­ral re­sources. It was meant to profit them so that it leads to in­clu­sive growth. In the great In­dian pol­icy bazaar the chal­lenge is to en­sure that even this not-so-great pol­icy is used as per its orig­i­nal in­ten­tion and to find ways to im­ple­ment it so that it can do what is was meant to do: bring change in the lives of the poor.

I will keep you posted on the up­dates on this is­sue.

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