Stopping mining projects will not help displaced people: FM

Coal ministry opposes concessions for PSUs in profit sharing.

Finance Minister Pranab Mukherjee on Friday said people displaced due to mining projects should be provided alternative sources of livelihood in addition to adequate compensation.

“The solution does not lie in companies stopping mining activities. It lies in providing alternative sources of livelihood to those displaced. We have to ensure that we compensate them and make them beneficiaries of economic development,” he said at the Coal Summit 2010 here.

On the possibility of public sector undertakings (PSUs) getting any concession in the profit-sharing regime, to be introduced by the new mining Bill, Coal Minister Sriprakash Jaiswal, who was also present at the summit, said: “There is no proposal being considered by the Group of Ministers (GoM) to treat PSUs separately. We will have to offer level playing field to both the private and public sector companies.”

A 10-member GoM, headed by Mukherjee, is currently finalising the draft Mines and Minerals (Development and Regulation) Bill, which is likely to make it mandatory for mining companies to share 26 per cent of their profits with the tribal population affected by the projects.

Recently, Steel Minister Virbhadra Singh, also a part of the GoM, had sought “special consideration” for PSUs like Steel Authority of India Ltd (SAIL) and mining major NMDC in the profit-sharing provision.

The new legislation will also have provisions to check the rampant illegal mining in the country and is likely to be introduced in the coming winter session of Parliament.

Coal India Ltd, the state-owned coal miner, shares Jaiswal’s views on profit sharing. “We support the policy on distributive justice for the local populace affected by mining projects,” Chairman Partha S Bhattacharyya, who was also present, said. “We are not seeking any concession in profit sharing,” he added.

Domestic corporate entities have expressed discontent over the government’s profit-sharing proposal to benefit locals. Tatas, which run the private sector giant, Tata Steel, had recently stated that the government should not charge the profit shared as separate tax, as social obligation forms a part of the company’s operating cost.

Jaiswal also said the delays in obtaining forest clearances by mining companies were a major constraint in increasing production from captive coal blocks. The Union environment ministry had recently announced an indicative categorisation of the country’s coal bearing regions as “go” and “no-go” areas, specifying regions where mining could be permitted only after stringent forest clearances were obtained.