Centre for change in mining policy

Panel recommends competitive bidding

The Centre is planning this new initiative in a bid to bring in transparency in allocation of mineral resources.

As there have been complaints of corruption and nepotism in allotting mines under the existing system, the Centre recently constituted a high-level committee headed by former Union finance secretary Ashok Chawla to recommend a policy on the distribution of scarce natural resources.

The committee, which started studying existing policies and its implementation, is learnt to have favoured the overhauling of the current system by introducing auctioning of leases. Now, the state governments invite applications from companies for mining lease and select them on a first-come-first-serve basis and recommends names of the companies to the Centre. Following the state’s recommendations, the Centre has given its green signal.

There were complaints from many sections that the existing system failed to fetch revenue for the state government. “If the competitive bidding system is introduced it will help the exchequer earn more revenue,” sources in the ministry of mines told Deccan Herald.

The Chawla committee will submit its report to the Group of Ministers (GoM) on corruption headed by Finance Minister Pranab Mukherjee. The ministerial panel was constituted to suggest legislative and administrative measures to deal with cases of corruption and to bring transparency in the functioning of the government.

The ministry of mines is likely to put on hold its proposed amendments to the Mines and Mineral Development and Regulation Act to incorporate the recommendations of the Chawla committee.

The Federation of Indian Chambers of Commerce and Industry had insisted the first-come-first-serve basis should continue. But the government is of the opinion that since auctioning under the New Exploration and Licensing Policy for oil and gas has worked well and it can also be replicated in mining sector.

Before finalising the bidding issue, the ministry of mines is likely to seek the opinion from the states.