Top

Welcome the MMDR Act Amendment

Those who dig precious mineral resources of the country and sale the same at a massive profit mostly to buyers abroad are now busy lobbying hard against the proposed amendment of the MMDR Act. The group of ministers had given in principle approval to an important clause in the bill that all mining companies will spend 26 per cent of their previous year's profit for the benefit of the tribals whose habitats get ravaged for the mining extraction activity.

The miners who have made huge pile of money during the last few years of commodity price boom are not willing to share their riches with the natives of the land. Their argument is that such stipulation will turn mining as non-viable. They cite the listed public sector companies and try to point out how these PSUs will lose value. What these miners do not mention, in fact they will never mention, is how will their profitability be affected.

For one most of these companies are privately owned. Their balance sheets are neither transparent nor are easily available in the public domain. If the clause as proposed is enacted at the most their personal wealth will shrink a bit. More important as the Planning Commission has pointed out, and was argued by us as well, there would be many opportunities for the intransparent mining companies to window dress their books and show less profit to share with the natives. Clearly there must be some stringent condition laid so that the cost of evasion turns prohibitive.

The other issue that is being discussed in the government is how to draw a line between responsible corporations and profiteering private-mining companies. The former spend for the betterment of the regions where their mines are located.
NMDC has started constructing a steel plant in the heart of Dantewada. The Navaratna PSU constructed schools for the tribals so that once the steel plant is ready; their children can join the workforce. The people of the district, a hotspot for Maoist activities, welcomed overwhelmingly NMDC's effort of developing the mineral rich region. Clearly tribals are looking forward to use of resources for their development as well.

The merchant miners are against this. They neither spend for CSR activities nor for value addition — they merely dig, shovel and then ship the minerals for huge profit. They are now busy distributing notes on how the MMDR Act amendment will impact the mineral industry.

Luckily in the post-2G Delhi, there are not many takers for such notes, neither in media and hopefully nor in the bureaucracy. The responsibility of the government in a democracy is to look after the interest of the “aam admi”—those who have no means of reaching anybody influential. The government is on the right course — for a change. One only hopes that it does not change direction midway.

  Similar Posts

Share it
Top