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View: Address the mineral imports malady in resource-rich India

 

Date | Jan 22, 2019:

The Narendra Modi government must be complimented for showing urgency in bringing about policy changes and legislations to address economic concerns. No wonder the economy is on an upswing, recording the fastest growth in the world, and on the verge of becoming the fifth largest after the US, China, Japan and Germany. Backed by arguably one of the largest young working populations and consumption driven by increasing middle-income households, the nation is provided with many unprecedented growth opportunities. To cash on these, policy planners have to tackle many challenges.

 

One of the biggest challenges the government has undertaken is Make in India. It can be a reality if the industry is promoted — to meet domestic consumption, replace imports gradually and become self-reliant, especially in areas where the country has resources — natural or otherwise — in abundance. High import dependency, to the extent of over 80% on minerals and crude oil, is a big drag and needs to be addressed as the topmost priority.

 

In line with this focus, the government has pushed an open acreage policy in the oil sector and speeded up auction of even small and marginal fields.

 

Minerals are next only to oil on the imports bill. India is richly endowed with natural resources, yet is not recognised or leveraged the way Australia, Brazil and China are. I wish India to quadruple share of the mining industry, from 2.5% to 10% of GDP. This could, in turn, be the panacea for welfare-centric policies. Stepping up mineral production with conducive policy measures can help generate resources to fund these policies.

 

The next budget can be a good starting point to raise additional funds by unlocking natural resources. In my recent communication with the government, I said there were around 40 listed companies and PSUs which had the potential to at least triple their production.

 

The country has already paid a price by delaying the open acreage policy for oil and gas and that has cost us dearly in terms of domestic production, GDP, imports bill and outflow of hard-earned forex. Mining should not suffer the same fate, and a comprehensive policy should be formulated for responsible and sustainable exploration of natural resources.

 

Related PSUs should be autonomous, empowered with strong and independent boards and, to help these companies, take their own decisions, including on fundraising. This can be achieved without any employee retrenchment. PSU autonomy will free up around 50% of our bureaucrats’ time, which can be used for more innovative projects.

 

Similarly, the government needs to empower district collectors with decision-making powers on land, environment and other matters for smooth industrialisation.

 

These are some of the ideas the government should consider ahead of the budget.

 

Beyond the budget, as we head towards elections, I hope and I am confident that national development will be the focus of political discourse. This alone can ensure that pro-growth policies are continued. It is for the government to unleash the untapped energy of the nation to ensure India reaches among the top three economies in the next decade.

 

(The writer is Chairman, Vedanta Resources Plc. Views expressed are his personal and not of the economictimes.com)

 

 

(Source: https://economictimes.indiatimes.com/)