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Supreme Court ruling in 2012 said auctioning should be the
way forward. But to grow the sector, more exploration will be
needed, as well as a win-win plan that will enable locals to give
up land. “India has not found any new mineral deposit in the
last 40 years,” said the executive cited earlier. “It is not as if
exploration will displace people. There is modern technology
available.” To bring in foreign companies, the government will
have to sweeten deals by allowing them to sell commercially
in the local market. Such companies are unlikely to be
pleased with export curbs. The
big stranded projects such as
Posco’s project in Odisha,
which at $12 billion is the largest foreign direct investment
(FDI) in India, would need
state-level clearances for mine
and land acquisition. Local
protests may be an additional
hurdle beyond the control of
the centre. The large taxes on
mining will be another issue.
The effective tax rates are 6080%, which is burdening miners. Plus the new mining Bill, that proposes that a quarter of net
profit be shared with locals, will be another dampener. “The
problem with the mining sector is, it is still carried under three
major Acts which are very old and need some very important
amendments,” India’s infrastructure, automobiles and consumer goods sectors are dependent on iron ore and steel—the
power sector’s single-biggest raw material is coal and the electrical and packaging industries bank on bauxite and aluminium. In fiscal 2013-14, the mining sector contracted b