Pay for delays in clearances; ASSOCHAM to Govt

MANGALURU: As senior ministers in Prime Minister Narendra Modi's government are looking for solutions to revive economic growth, the ASSOCHAM has submitted an action plan for doubling the contribution of the mining sector to the national GDP and adding to the employment. The action plan includes compensation to the investors in case clearances are delayed.

In a set of recommendations to be incorporated in the new national mineral policy being piloted by the Mines Ministry, the ASSOCHAM has said that delays in the projects have been resulting in cost over-runs which in turn make them unviable and non-starters.

"All statutory clearances for a mining project should be time-bound with the provision of deemed approval if approval is delayed beyond the specified time. There should be a system of compensating the lessee if any authority withheld approval on unreasonable ground, "the chamber said in its communication to the chairman of the committee for review of the National Mineral Policy, 2008 - K Rajeswara Rao, who is also the additional secretary in the Ministry of Mines.

The chamber said before granting any area for exploration or mining, the authorities should take necessary in-principle approval for forest and environment clearances.

It said the mining sector should be allowed to prosper for realizing its full potential. It can play a major role in creating jobs and giving a boost to the manufacturing in the country. The contribution of mining sector in the GDP can be doubled to 4%.

For attracting fresh investment in exploration, for minerals other than bulk minerals, exploration licenses should be granted to companies with rights to seamless transition to mining license. Besides, a company holding such licence should be permitted to transfer its right to mining to another entity after successful exploration as commercial transaction. In the process, the Government may levy a small transfer fee as a percentage of the commercial transaction.

"This provision would go a long way in attracting both domestic and FDI into exploration," the Chamber Secretary General D S Rawat said in his letter to the review committee chairman.

For attracting Investment in manufacturing, all end-user plants should be eligible for direct grant of the mining licenses for the principal mineral required in the end-user plant. Auction should be applicable for merchant mines only. '' This provision would spur investments in the steel and cement plants. Without attracting investment in new steel plants , it would not be possible to achieve the steel capacity of 300 million tonnes as envisaged in the New Steel Policy of the Government."

Besides, the regulatory framework should eliminate all types of discretionary powers to authorities while the latest technology should be used for monitoring all activities from mining to delivery of mineral at the final point of use. Monetary penalties for each type of violations should be specified in the Rules. Mining should not be stopped for violations which are compoundable through penalties.