Why Shah commission report on Odisha mining scam will gather dust

Loss to the exchequer is four times than in Karnataka, yet the outrage is missing

The Shah Commission report on iron ore mining has the potential to cripple the steel sector, with the impact more devastating than the ban on mining in Karnataka and Goa. The report has indicted both the central and state government for systematic illegal mining worth thousands of crores in Odisha. 

 

MB Shah Commission has said that Rs 60,000 crore should be recovered from miners for conducting illegal mining in the area [Read here]. Naturally, the miners have trashed the report [Read here] saying that government has received royalties and taxes over the years and it is improper to go back on contracts as old as 1994. 

 

But, even the miners in Karnataka and Goa were paying a miniscule royalty to the government and selling ore at a huge profit. And where is the logic in not looking at records from 1994 onwards. These companies had started production without having the required clearances, in other words, they started selling iron ore which was not rightfully theirs. Over the years they have digested the profits which has been ploughed back in their business to help them grow to the current size. 

 

The report says that the Tata group, Birla group, even government owned SAIL and 70 other companies have violated environment and forest laws.

 

A scam hit UPA government has been sitting on the report for the last six months [Read here] and was scared to table the report or even finalise an action take report (ATR). Thankfully, there is a law that says that the government is obliged to table the report along with a memorandum of action taken in the parliament within six months. 

 

According to the Lokayukta, loss to the exchequer in Karnataka was Rs 16,085 cr. Shah panel on the other hand pegs recovery to nearly four times in Odisha as compared to Karnataka. Yet there is no  sound bytes in Odisha, with few so-called-experts even considering it as a scam. Perhaps because 'big and clean corporates' are involved or the government is now politically immune to scams. 

 

However, the fact remains that if the recommendations of Shah Commission is implemented, the sector will be facing tough times ahead. The commission has recommended a cap on iron ore production, review of environmental clearances to Tata Steel, SAIL and JSPL.  

 

According to Deutsche Bank's analysts Abhay Laijawala and Anuj Singla, Odisha contributes 45-50 per cent of India's iron ore production and any disruption in supply could potentially lead to plant shutdowns in the domestic steel industry or heavy reliance on iron ore imports. 

 

This seems to have spooked the govt. Mines ministry has opposed a cap on iron ore production while the environment ministry has disregarded the recommendation to cancel licences of firms encroaching forestland. Envisaging such hindrances, the government at the centre has gone a step further by refusing the Shah Commission to finish its work in Jharkhand and Chhattisgarh. Clearly the media is wrong in blaming the government for not having corporate India friendly policies.