India, once part of Gondwanaland, sees its mining sector playing a modest role in GDP percentage. Despite geological roots, economic dynamics have diversified, with mining making a comparatively restrained contribution. The nation’s GDP draws strength from a spectrum of industries, showcasing India’s resilience and adaptability in economic evolution.
UPSC Mains General Studies Paper – 1 Mains 2021
UPSC Mains Civil Services IAS Exam Question Paper – 2021
Approach
- Start with a brief intro of the keyword the “mining industry” with the context of India’s GDP (Gross Domestic Product).
- Explain the Reasons behind this less percentage of contribution in India GDP.
- Way forward –Steps taken by the Government and their significance.
- Conclusion accordingly.
Answer
Introduction
- The mining industry refers to the sector involved in the extraction and processing of various natural resources from the Earth’s crust.India, being a part of Gondwanaland, possesses significant mineral resources such as coal, iron, mica, aluminium, and more. Currently, the mining sector’s contribution to India’s GDP stands at a mere 1.75%, which is significantly lower compared to countries like South Africa and Australia, where the mining sector contributes 7.5% and 6.99%, respectively.
Body
The Reasons behind less percentage of contribution in india GDP: There are several reasons that can contribute to a relatively lower percentage of contribution to India’s GDP. Some of the common factors include:
- Limited Industrialization: Certain regions or sectors of the economy may have limited industrialization, resulting in lower production and contribution to GDP. This could be due to factors such as lack of infrastructure, technology, skilled labour, or investment.
- Agriculture Dominance: Agriculture plays a significant role in India’s economy, employing a large portion of the population. However, the agricultural sector typically has a lower GDP contribution compared to industrial and service sectors. Dependence on agriculture can lead to a lower overall GDP percentage.
- Informal Sector: India has a significant informal sector, comprising unregistered and small-scale enterprises. These informal businesses may not be fully captured in GDP calculations, resulting in a relatively lower GDP percentage.
- Income Inequality: Income inequality is a persistent issue in India, with a significant wealth gap between different sections of society. Higher income brackets tend to contribute more to GDP, while lower-income groups have a relatively smaller share.
- Structural Challenges: India faces structural challenges such as bureaucratic hurdles, complex regulations, and inadequate infrastructure. These factors can hinder economic growth and limit the contribution to GDP.
- Regional Disparities: There are significant regional disparities in India, with certain states or regions having a stronger economic base and higher GDP contribution compared to others. Unequal development across regions can impact the overall GDP percentage.
- Population Growth: India has a large and growing population, which can influence the GDP percentage. With a larger population, the per capita GDP may be relatively lower even if the overall GDP size is significant.
Way forward: The MMDR Amendment Bill, 2021, brings significant changes to the Mines and Minerals (Development and Regulation) Act, 1957, governing the mining sector in India. Here are the key points of the Bill:
- Removal of end-use restrictions: Mines can now be utilised for various purposes as per the lessee’s discretion, eliminating the requirement for specific end-use reservations.
- Sale of minerals by captive mines: Captive mines, excluding atomic minerals, can sell up to 50% of their annual mineral production in the open market after meeting their own requirements, allowing them to generate additional revenue.
- Central government’s role in auctions: The central government can specify a time period for completing the auction process, and if the state government fails to do so, the central government can conduct the auctions.
- Transfer of statutory clearances: Statutory clearances granted to a mine will remain valid throughout the lease period of the new lessee, reducing administrative burdens.
- Allocation of mines with expired leases: Mines with expired leases may be allocated to government companies, ensuring continuity in mining operations by granting leases for up to 10 years or until a new lessee is selected.
- Extension of leases to government companies: The central government can prescribe the lease period for mining leases granted to government companies, which can be extended by paying additional amounts specified in the Bill.
These amendments aim to streamline the mining sector, promote ease of doing business, and encourage the participation of government companies in mining activities.
Conclusion
- Hence, To ensure the efficient utilisation of mineral resources, it is crucial to expedite the clearance process. It is imperative to strictly enforce mining regulations, particularly in relation to the prohibition of Rat-Hole mining and unscientific mining practices, in order to prevent mining accidents. A viable solution lies in prioritising the adoption of advanced technology for underground mining, which is employed by miners worldwide. By embracing high-end technology, the mining sector can enhance safety measures and optimise productivity.
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