A decade of economic reforms in India: the mining sector

Abstract

Introduction: The geological and metallurgical history of India is similar to mineral rich Australia, South Africa, South America, and Antarctica, all of which formed a continuous landmass before the breaking up of Gondwanaland. India contains minerals and resources. Some of them are known to be in abandon supply, while many are least known. At the current level of knowledge, India faces deficit in many minerals, particularly base metals and hydrocarbons. Considering the growing future needs and security of supply of these minerals, it has to enhance its resource base considerably through various options including intensive exploration drive, improving the recovery and production from the existing resource base and ensuring supplies through imports. India also needs to enhance its export potential of a number of minerals and metals, in which it has sufficiently large reserves. The present thrust of deregulation is considerably driven from the fact that most of the mineral deposits, which are found on surface and easily extractable, have already been explored. Now, exploring agencies will have to look for increasingly difficult terrain and search mineral at greater depths with more sophisticated technology. This requires more capital and larger scale operations. In order to attract capital and technology from abroad the mining sector as a whole require adequate liberalisation. Considerable progress has been made in this direction in several areas. Yet many vital important areas are left behind. The aim of this paper is to review the progress made in liberalisation of the mining sector and flag important aspects that still need attention. A particular attention is paid towards the coal sector. Rest of the paper is organised as follows: Section 2 provides an overview of the mineral sector in India and its contribution to gross domestic product. Section 3 presents a brief legislative framework in which the industry has been operating. The review of reforms is presented in section 4 and conclusions are in section 5.