1622 hours

SHRI E.M. SUDARSANA NATCHIAPPAN : Madam, actually the Constitution of India has given the powers to the Central Government under List I for regulation of mines and minerals development to the extent to which such regulation and development under the control of the Union is declared by Parliament by laws to be expedited in the public interest. Therefore, the main reason is only for regulation of mines and then only there will be development. But clause 3 actually wants to put the cart before the horse. They want to put first the development and then regulation. That power is not given in the List I, List II and in the State List also.

In the Statement of Objects and Reasons also, there is no reason given why there is topsy-turvy, why the development comes earlier and regulation comes latter. Regulation is only relating to the power because it is a natural asset; it is a gift given by the nature to the country. The Americans and Western countries are not utilizing the mines but they are exploiting the mines of Asian countries. That is why, the framers of the Constitution have made it that we should regulate and then develop it. Now you want to develop it and then regulate it. That is a topsy-turvy work which is against the Constitutional powers also. If anything happens before the court, this may be set aside as it is unconstitutional because the powers are not given in both the Lists. That is my main objection.

My second submission is regarding my constituency. There is a graphite mine. As it is, the Central Government has not got the power to regulate the mines but for the 30 years, graphite has been taken up and nothing has been developed. The Government was taking up all these graphites, spending money but nothing is coming up. Such things should be looked into by the Ministry so that development can be brought properly.

MR. CHAIRMAN: You said you had only one point to make. You have completed two and you are going for the third.

SHRI E.M. SUDARSANA NATCHIAPPAN : I have one more point to make. Now there is a three-tier system. Under article 243G of the Constitution of India, you are devolving the powers and authority to the State. When you are gracefully giving the powers to the States, the States should give them to the Panchayats also. Panchayats are managing the property. They are looking after the property. They are developing the property but nothing is going to them. All the royalties, reigniorage, fee and dead rent charges, everything goes only to the State Government. Nothing is going to the Panchayats. Therefore, when the Central Government is making laws, the three-tier system of the Constitutional amendment should also be taken into consideration and Panchayats should be given the power to look into it, develop it and the taxes should be shared with them because the amendment is not giving any tax benefits under the three-tier system. Therefore, the Panchayats should also get the powers.

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THE MINISTER OF MINES AND MINERALS (SHRI NAVEEN PATNAIK): Madam Chairperson, I have been listening carefully to the valuable suggestions made by the hon. Members regarding the amendments proposed to the Mines and Minerals (Regulation and Development) Act, 1957. I have also noted the apprehensions of several Members and I will deal with those in my statement which I am now giving.

As the hon. Members are aware, the Act lays down the legal framework for development of minerals that our country is richly endowed with. For a very brief and recent history of the M.M.R.D. Act, we first should go to the beginning of liberalisation, which began almost a decade ago, in 1991 to be exact. In 1993, a National Mineral Policy was evolved which wished to bring in more powers to the States and also to open certain minerals for the private sector. Taking this into account, the Mines and Minerals (Regulation and Development) Act was amended in 1994. Later, in 1996, under the Chairmanship of the then Minister of Mines, a Conference was held with all the relevant State Ministers and State Secretaries of Mines and Geology to formulate further liberal measures in the mining sector.

In 1997, the then Secretary of the Department of Mines was made Chairman of a Committee to look into further liberalization in the mining sector and also giving even more power to the States. Today those suggestions from that Committee have come as the present proposed Amendments to the Act.

This Bill wishes to categorise, as is done according to international standards, the reconnaissance permits, the prospecting licences and mining leases according to the appropriate category. The proposed amendments to this Act formally deal with it.

As far as area limits for prospecting and mining is concerned, these restrictions were nation-wise. Now these area restrictions are proposed to be done State-wise. As far as the States are concerned, more authority is being delegated to them. A long-standing demand of many States has been to permit them to do the licensing of the mineral limestone. This is now going to the States.

Secondly, the mining Plan which was approved by the Centre, will now be allowed to be approved by the States.

Thirdly, mining in non-contiguous areas and non-compact areas was permitted by the Centre. Now this will be done by the States.

The first renewal is presently approved by the State Governments. Now all renewals will be done by State Governments.

Now I come to ...

SHRI MANI SHANKAR AIYAR (MAYILADUTURAI): Hon. Minister, may I ask a question?

Parliament passed in December, 1996 the Extension of the Panchayats to the Scheduled Areas Act. That contains a number of provisions relating to mining with respect to Fifth Schedule areas. In the recitation that the hon. Minister has given, there has been no reference to that Act passed by the Parliament. I just seek an assurance from the hon. Minister that in implementing these delegated powers to the States, it will be ensured by the Central Government that the States will observe the provisions of the Extension of Panchayats to the Scheduled Areas Act, 1996. Thank you.

SHRI NAVEEN PATNAIK: Madam, if the hon. Member, Shri Mani Shankar Aiyar permits, I could come to the point that he made later.

Now, as far as the laws regarding curbing of illegal mining is concerned, new provisions to the law are being made to strengthen the laws against illegally mined minerals being transported. Also, the confiscation of equipment which is used for illegal mining and the seizure of illegally mined minerals which were stored are there.

I would like now to come to some of the points made by the hon. Members.

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SHRI NAVEEN PATNAIK : Yes. I will come to that.

Hon. Members need not be needlessly exercised that the Bill favours multinational companies. I want to clarify that the Bill is neutral with regard to Indian companies and subsidiaries of multinational companies. As the Members are aware, we need capital as well as state of the art technology for exploration of minerals.

Also, I want to point out here that in 1998, our nation's equivalent cost of exploration of minerals was to the tune of around $ 10 million. In the same year 1998, exploration of minerals all over the world was to the tune of something like $ 4,000 million. So, I just want to say that some of the new amendments are to make an investor-friendly environment so that more investment is made in our country. Of course, with that, more of our people will get jobs etc.

If Indian subsidiaries of multinational companies do reconnaissance and identify mineral occurrence, they are in no way depriving the country of its mineral wealth. I may make a point that it may not be possible to physically take away minerals in their raw form. For example, gold deposits having 20 grams per tonne are very good deposits. But if someone is to take this 20 grams of gold out of India, he will have to carry a muck of one tonne which may not be economically viable. Consequently, the value addition will have to take place in India. Hence, it would not be correct to assume that investment in the mineral sector would result in flight of mineral wealth from this country. So far 64 prospecting licences have been approved for an area of around 90,000 square kilometres in favour of companies registered in India. As of now, only Indian nationals or companies registered in India can hold a licence.

I also want to clarify, for the first hon. Member who spoke, that the last amendment to the Act was done in 1994 and not 40 years back. As far as environment protection is concerned, no mining can take place without the approval of the Mining Plan which should effectively takes care of environment. Moreover, for all mining leases above five hectares, approval of the Ministry of Environment and Forests is required. Similarly, for all prospecting cases above 500 hectares, environment clearance from the Ministry of Environment and Forests is required. Hence, environment aspects are taken care of under the present scheme of mining.

Now, I come to another point. As per section 2 of the Forest (Conservation) Act, 1980, no mining can take place in forest areas. Under section 4A(4) of the Act, if a mine is in disuse for more than two years, the lease shall lapse.

As regards royalty enhancement, it can be done only after three years. The next revision of royalty is due after 11th of March, 2000.


SHRI NAVEEN PATNAIK: If the hon. Member shows some patience, I will come to this point also.

As regards the scope of nature of work for reconnaissance and surveys, aerial surveys is totally different from that of the prospecting operations, as defined in the Act. Reconnaissance operations broadly include the operations undertaken for preliminary prospecting through regional surveys, aerial surveys, geophysical and geological mappings. Reconnaissance does not include pitting, trenching, drilling and sub-surface excavation, test drilling of boreholes etc. In mineral-rich countries, reconnaissance is a stage different from prospecting and this provides more leverage and time to the potential investors to establish the occurrence of minerals. India is consequently adopting the established practice through recognising reconnaissance as a distinct stage of operation.

"First come, first served" is a well-recognised principle in mining throughout the world. Even under our mining law, this has been recognised since 1957.

State mining officers and police can seize the vehicle involved in transportation of illegally mined minerals. Detailed rules can be notified by the States in this regard. Scientific and systematic mining is ensured by the Mining Plan which is approved. I would like to assure the hon. Members that this is a very progressive legislation.

Hon. Members have noted that, at present, the emphasis in the Act is on regulation, and development takes a back seat. It is now proposed that the stresin should be on development. This is the underlying object of the Bill. Even in the industrial arena, the law is Industrial Development and Regulation Act.

Uniform rates and royalty are required for uniformity throughout the country. Hence for major minerals, only the Central Government is empowered to revise the royalty. For minor minerals like stone, sand, etc., which are low value, State specific minerals, States have the power to revise the royalty.

I would also like to emphasise that this is not a colourable legislation, but a very progressive legislation. Under Entry 54 of the Union List, the Act has been promulgated and is being amended.

After adequate consideration by the Government, limestone is being deleted to delegate more powers to State Governments, and Members should not be apprehensive on this account.

Granite is a minor mineral and the Central Government is not concerned with the grant of mining lease for granite. It comes under the State Governments.

The Tandon Committee has not recommended ad valorem fixation of royalty on all minerals. In case of low value minerals involving large numbers of leases, introducing ad valorem system is not practicable. In case of 17 categories of minerals, out of 66, ad valorem system is already being followed.

One hon. Member asked about bauxite, and I would like to clarify this to him. Bauxite needs to be retained in the First Schedule of the Act because of the following reasons.

Some of the major players in aluminium sector like NALCO, BALCO, are public sector undertakings of the Government of India and, therefore, the Central Government should continue to have a decisive say in the grant, renewal, of these licences. Many multinational joint ventures and private companies are likely to enter the aluminium sector either to meet the domestic requirement or for export purposes. Some of them are framing proposals for setting up port-based export oriented alumina plants. It will not be always possible to have the source of bauxite and port-based export oriented units located in the same State, and hence delegation of powers to States for grant of mining leases may be counter-productive. India has one of the largest deposits of bauxite and a national level planning and decision is required for the best mineral development of bauxite. Bauxite and aluminium industry has a vital role to play in the national economy, and hence there is a need to retain the powers of grant of prospecting licences and mining leases by the Government of India in the wider national interest.

The distribution of resources of bauxite are lopsided and mostly concentrated in three or four States, for example, Orissa, Andhra Pradesh, Gujarat and Madhya Pradesh. Such an unequal distribution of resources necessitates centralised decision-making and overall strategy of development and exploitation of bauxite, basically to be guided by long-term national goals and perspectives.

Resources of refractory grade bauxite suitable for manufacturing high alumina refractories is relatively limited. This being finite, best use and judicious exploitation of this grade of bauxite is all the more important.

Madam, if you could be patient with me for a few minutes, I shall complete my submission. I would just like to clarify a few more points that have been made by the hon. Members. The royalty of minerals is collected and retained by the State Governments. I have already spoken about the deletion of bauxite. I have also stated that the royalty enhancement period is a minimum three years. Transfer of lease is permitted under rule 37 of MCR, 1960. The power to permit the transfer is also being delegated to the States. Rules would be amended accordingly.

Sir, earth is a minor mineral. Grant of quarry licence, regulation etc. of brick earth is totally under the purview of the State Governments. For the point raised by Shri Mani Shankar Aiyar, I would like to state that the amendment proposed will have nothing to do with the Act formulated in persuance of 1996 Constitution amendment relating to local bodies and hence there should be no apprehension on this ground.

SHRI MANI SHANKAR AIYAR : The Constitutional amendment was not in 1996. The Constitutional amendment was in 1992 in terms of which the Parliament has passed an Act, a piece of legislation which is a law that contains provisions for the protection of tribal rights with respect to minerals found in the Fifth Schedule areas. Therefore, I have the apprehension that since several States have not been implementing the provisions of the Central Act in Scheduled areas lying within that State, there is a danger that unless the Central Government takes this into account, there would be a grave danger that in the process of delegating your powers to the States, you are depriving yourself of the ability to ensure that the States respect the rights of the tribals in the Fifth Schedule areas in composite States which contain such areas.