Sidelining the States

The Mining amendment Bill, passed by Parliament, is another classic case of arbitrary lawmaking

While there can be no two opinions about the need to reform India’s archaic mining laws to tap the full potential of the industry, the way the NDA government bulldozed the mining amendment Bill in Parliament was highly deplorable. The Mines and Mineral (Development and Regulation) Amendment Bill, 2021, passed by both Houses disregarding the opposition’s demand for further scrutiny by a select committee, is a classic case of arbitrary lawmaking. It amounted to infringing on the rights of the States and undermining the federal spirit. The manner in which the new legislation was rushed through fits into a familiar pattern marked by the absence of a consultation process. The key problem with the amended legislation is that it completely sidesteps the States, allowing the Central government to directly auction the mines. Mining is a sensitive subject as it impacts the environment and the livelihoods of local people. Since it is the State governments which often bear the brunt of any public protests against mining activity, they need to have a final say in these matters. The States play a key role in obtaining the consent of the gram sabhas for allowing any mining activity. Unless the local people are allowed to have a share in the profits, the mining industry cannot thrive. The new legislation empowers the Centre to conduct auctions or re-auction processes for mining lease if a State government fails to complete the auction process in a specified period. It allows captive miners to sell up to 50% of their annual production in the open market after meeting their own requirement. The Central government, however, can increase the threshold through a notification, with the lessee paying additional charges for minerals sold in the open market.

The Bill brings long-overdue reforms to the mines and minerals sector. There are expectations in the industry circles that it would help create more jobs by opening up the mining sector to private players bringing in state-of-the-art technology and also boost the metal and ancillary industry. However, the implementation mechanism should not be allowed to become yet another instrument of arbitrariness in the hands of the Centre. The Centre-State friction and political differences should not be allowed to hamper the growth of the mining sector. There is a need to have an independent regulating authority to ensure impartiality in the decision-making and judicious utilisation of resources for the benefit of the country. The Centre and State governments must work together to ensure that mining remains environment-friendly and the projects are cleared only after proper assessment of the environmental impact. The mining sector has a huge potential for job creation at the local level, which can help counter migration.

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