-The Indian Express
The Union cabinet has approved a draft of the new Mines and Minerals Development and Regulation (MMDR) bill, which has long been expected to replace the antiquated legislation that partly governs the mining sector. There are important issues that still need to be worked out: implementing the bill in its current form would be severely problematic, and there are several loopholes that might cause the effect of the bill, as written, to be counterproductive. Hopefully, the scrutiny that the draft will now be subject to, and discussions in Parliament and in committee, will improve the bill in the direction it needs to go.
The draft bill provides for 26 per cent of mining profits to go to the local community. The impulse is unexceptionable: mining operations should give local communities a stake in their operation. It is important, however, that the mechanism by which those in the area share in the benefits of mining be transparent and effective. How will the funds be disbursed? How will the proceeds be overseen? Consider this: net profits are decided for a company’s operations as a whole; but the compensation fund out of profit is supposed to be created for each mine, for each district. Compliance becomes difficult for companies, and evasion seems certain. It will open the door, once again, to political interference and favour-seeking.
And it is precisely this door that the new MMDR bill is supposed to close. The mining industry has spread its tentacles across India’s state politics, an unregulated monster that needs oversight, and quickly. In Karnataka, in Goa, in Andhra Pradesh in particular, local government has been warped and state politics has been held hostage to the super-normal profits that accrue to those who have the political heft to evade regulation on their mines. That the government is at last moving to ensure the mining sector receives this crucial oversight is a relief. But the details must be worked out carefully. There is no reason to suppose that with a more transparent and locally friendly mining regime, mining output should not increase.