The Group of Ministers, led by the Finance Minister, Mr Pranab Mukherjee, has approved a new mining Bill that incorporates a mechanism of profit/royalty sharing by industry with project affected people.
“The GoM has unanimously agreed on the Bill. We expect to take it to the Cabinet over the next 15 days and hope to introduce it in the forthcoming Monsoon Session of Parliament,” Mr Dinsha Patel, Minister of State for Mines, told reporters after the meeting.
However, Mr Patel said “the provisions of the proposed Bill would be disclosed once proceedings are completed”. Through the proposed legislation – Mines and Minerals (Development and Regulation) Bill 2011 – the Government seeks to attract foreign direct investment in the country's mineral sector.
It could not be ascertained whether the panel agreed to the contentious initial proposal of 26 per cent mandatory profit sharing or the latest modified proposal of sharing an amount equal to 26 per cent of the royalty paid in the previous year with those displaced by the mining firms.
The mining industry has vehemently opposed the Government's initial proposal on profit sharing and as an alternative had suggested creation of a royalty-linked fund for the welfare of project affected people.
The proposed legislation – MMDR Bill 2011 – also seeks to expedite the grant of mineral concessions in a transparent manner.
Regulatory authority
The Bill also proposes setting up a National Mineral Regulatory Authority for effective regulation of the sector to deal with the growing menace of the illegal mining in the country. It also seeks to set up Tribunals at both Centre and State levels for speedy clearance and disposal of mining applications.
The new Bill seeks to give an impetus to sustainable mining by making it mandatory for the mining companies to disclose their mine closure plans before commencing operations.