Set up NRP & NRR for transparent auction mechanism: Assocham

Industry body Assocham today said the government should formulate a Natural Resources Policy (NRP) and set up a Natural Resource Regulator (NRR) to ensure fair, transparent and an accountable auction-based mechanism for the allocation of high value natural resources.
At present, the government is stressing on involving private players to undertake mining on behalf of Coal India Ltd (CIL).
The focus is on MDO (mining, development and operations) model, wherein private sector undertakes mining operations, while the ownership and sale of coal rests with CIL.
"It is clear that CIL does not have the capacity to meet the current and projected energy demand for India and that greater involvement of private sector is inevitable.

"Given this, it becomes important to focus on introducing a series of policy reforms which correct for various impediments that are observed in introducing competition in the sector," Assocham said.
Given the changing dynamics, the role of government needs to be appraised from being the operator to a facilitator, creating policies for the private investments to flow in, it added.

In spite of India having a large mineral deposit base, mining sector's contribution to the GDP has remained largely stagnant, it said.
India produces as many as 87 minerals, which includes 4 fuel, 10 metallic, 47 non-metallic, 3 atomic and 23 minor minerals (including building and other materials), the industry body said.

Mining sector employs a small percentage of India's population (0.3 per cent) as compared to 3.8 per cent in South Africa, 1.4 per cent in Chile and 0.7 per cent in China.
In addition, employment in the Indian mining sector has grown at a slower pace of just about 3 per cent per annum over the last 10 years. The average labour employed during 2012-13 in the mines was 1.36 lakh persons per day, it added.
Till now, exploration in India has lagged as compared to the growth of minerals and metals demand in the country, it said.
"One point of view is that the under-achievement in exploration is because of the difficulty in obtaining clearances, since much of the unexplored area lies either under forests or in populated areas," Assocham said.

Though detailed exploration requires only 10 boreholes to be drilled per sq km, it is hard to obtain forest clearances because of the corresponding access to infrastructure, leading to delays in detailed exploration, it added.
Another issue is the poor quality of blocks offered to private players for captive mining, which are generally not amenable to economic development, Assocham said.
These blocks often have challenging geology or surface constraints like forests, settlement, infrastructure etc.
Sometimes, the blocks are not divided scientifically, which in turn preclude their economic development, it added.