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From The Editor’s Desk

In a democracy, it is never out of fashion to talk of the poor and to innovate products for their benefit. Even if the measures so adopted, on closer inspection, prove faulty the democratic set-up sacrifices logic on the altar of populism. While accepting this natural tendency of a democracy, the result oriented is afraid that India's new Mining Act might end up as a non-starter due to the overdose of populism.

On the face of it, the decision of the group of ministers is unexceptionable. What is wrong in earmarking a mere 26 per cent of the profit a mining company will make for those who lose their habitation and habitat for the exploration of mineral resource? More so since the mining companies world over are on a huge profit earning cycle; given the unabated appetite of the mankind for precious resource. But there are doubts if the distributive justice will properly be served through such an enactment.

For one if this will give rise to innovative accounting practices to conceal profit is a critical issue. Second to plug the loophole there have to be elaborate machinery. Experience suggests that such bloated bureaucracy breeds huge corruption. Thus, the benefits which should have otherwise accrued to the land-losers would be passed on to maintenance of the checks and balances. Therefore the question is shouldn't one look for a more effective mechanism. To come to a conclusion one may take a closer look at the state-owned mining companies like NMDC or Coal India. Both operate in regions where the state finds it difficult to enforce its rule. For example Dantewada in Chhattisgarh is a place which the administration dreads.
Only about a month ago NMDC inaugurated a residential school and an ITI in the interiors of the district. The locals participated in the function which was attended by among others, the state chief minister and the Union Steel Minister. Evidently, the locals accept the fact that NMDC did serve their cause. Will an administrative machinery be more effective than the Navaratna PSU?

The available evidence suggests that the verdict of the locals is in favour of NMDC. If the Steel Minister Virbhadra Singh opposes the blanket imposition of the profit sharing clause in the mines bill there must be this experience which encouraged him to voice his concerns.

Therefore, the minister suggested special dispensation for PSUs like NMDC and SAIL which are actively engaged in the community development projects in its mining regions. The same applies to Coal India and its subsidiaries as well.
Had all mining companies been engaged in similar activities there would not have been the issue of rehabilitation of the displaced. Even the locals know it well. Thus, NMDC did not find it difficult to complete its process of land acquisition for the proposed steel factory at Dantewada while private companies like Essar fail to even start their mining operation.

What is more the slurry pipeline of Essar has been blown up by the Naxalites. The ministers in their wisdom felt that companies who are merely working for profit must pay for the betterment of the land losers and natives who lose their habitat.
While the intent is good ministers would have done well to introspect and encourage companies like NMDC or Coal India to carry on their activities without the tether of a new legislation.

Steel Minister has rightly brought this element into the debate over the new amendment to the MMDR Act.

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