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Short-sighted

The Mines Bill will replace the previous ordinance issued by the Government on October 21, 2014. The ink on this key legislation has barely dried and already the opposition parties, primarily the Congress and the Left, are up in arms against it. The bill, which is officially titled The Mines and Minerals Development and Regulation (MMDR) Amendment Bill, 2015 has profound implications for the citizens and environment of this country. The bill was promulgated after nearly a decade of debate on whether the original MMDR Act of 1957 needed to be amended in the first place.

The bill has been-at least if the opposition parties are to be believed-amended to suit the short-sighted interests of various captains of the industry. Simultaneously all attempts to mitigate the environmental and social impact of the coal sector have been dispensed with altogether. Experts say that institutional reforms are the need of the hour vis a vis the coal sector; however considering the immense challenges facing the sector, most of these reforms are inadequate and some of them may aggravate the current situation. For instance, consider the contentious clause, which states that penalty will be increased for violations within the existing institutional framework; this clause makes rent-seeking behaviour lucrative and will be hapless in curbing illegality. The more important issue to consider is the environmental impact of this bill.

Under the new Bill, all mining leases will be granted for 50 years. The lease for existing mines has also been extended to 50 years. After expiry, leases can be re-auctioned. This is problematic because thousands of simultaneously open mines will just increase the pollution to stratospheric levels. This bill also fails to tackle the nefarious industry practice of dig and run-under which mining companies open a mine and fail to close it properly because of low profitability of the mine. The most troubling aspect of the proposed bill, however, is that it exempts a large number of mineral deposits from auctions through various in-built provisions, qualifiers and caveats.

Rough calculations by various experts indicate that if the bill is passed without a relook then it could cause humongous losses to the public exchequer. Despite diluting essential social and environmental provisions significantly, the bill will not aid the growth of the mining sector in the long run. The mining sector requires fair contracts, clarity in auction processes and investor confidence; none of which will be achieved by this bill in its present form. It may please the industry with its short sighted focus on profits and bottom-lines; but in the future this bill may just be another instance of crony capitalism gone horribly wrong.
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