NEW DELHI | Jan 06, 2015: The Cabinet on Monday approved an ordinance for auction of iron ore and other minerals, adding to the growing list of such moves to push through what it believes are reform initiatives aimed at speeding up economic activity.
The ordinance, which will amend the mining laws to pave the way for more transparent allocation of minerals, is the fifth since Parliament session ended on Chirstmas eve. The Narendra Modi government has already pushed through ordinances to auction coal mines, increase the foreign investment ceiling in insurance from 26% to 49%, amend land acquisition-related laws and make arbitration rules simpler.
Amendments to the mining laws were expected to be rushed in through an ordinance last week itself but the government focused on land acquisition and arbitration. The government has argued that it has been forced to take this route as opposition parties led by the Congress were blocking key initiatives in the Rajya Sabha, where BJP does not enjoy majority.
"The Cabinet has approved promulgating an ordinance to auction iron ore and other minerals," a government source told news agency PTI after the meeting of the Union Cabinet chaired by Modi.
The ordinance would pave the way for introduction of competitive bidding for allocation of iron ore and other non-coal mines. It will also enable creating District Mineral Funds for the welfare of the project-affected people.
The government has defended the latest move arguing that the legislative action was felt as the government was finding it difficult to allocate mines, because the mines ministry could not table a bill during the winter session of Parliament to amend the Mines and Minerals (Development and Regulation) Act, 1957.
Industry body Federation of Indian Mineral Industries, however, has been opposing the auction route, saying it would sound the "death knell" for the industry and may lead to cartelization and waste.
The mining sector has been reeling under several issues like ban for the past few years. The previous UPA government had also brought in a bill in 2011 to amend the Act but it lapsed with dissolution of the previous Lok Sabha.
Mines minister Narendra Singh Tomar had earlier said the amendments were required to kick-start the sector by removing bottlenecks that are preventing the industry from becoming a growth-multiplier in the country.
(Source: http://timesofindia.indiatimes.com/)