Parliament on March 20, 2015 approved two crucial bills, which form part of NDA government’s reforms agenda, after the opposition unity was broken and a number of non-NDA parties backed the legislations in Rajya Sabha. Overcoming stiff opposition in the Rajya Sabha, where the ruling party is in a minority, the government displayed deft political management to pass the Coal Mines Special Provisions Bill as well as the Mines & Minerals Development and Regulation (MMDR) Bill. The government obtained the support of regional parties such as Trinamool Congress, Biju Janata Dal and AIADMK by pointing to them the actual quantum and benefits of revenues that states will receive from the auction of mines, thus overcoming opposition from Congress and the Left.
The Narendra Modi government was successful in getting a crucial bill on mines and minerals passed by the Rajya Sabha on the last day of the first half of the Budget session. The Mines and Minerals (Development & Regulation) Amendment Bill, 2015 to replace an ordinance promulgated in January, was passed by 117 votes in favour while 69 MPs opposed it. Among the parties, other than the BJP, that voted in favour are the Trinamool Congress, the Bahujan Samaj Party, the Biju Janata Dal, the Nationalist Congress Party, the Jharkhand Mukti Morcha, the Samajwadi Party and the AIADMK.
The opposition Congress and the Left voted against the bill while the Janata Dal-United and the Rashtriya Janata Dal abstained. The Congress and the Left had demanded that the bill be sent to the Select Committee of the Rajya Sabha.
The Mines and Minerals (Development and Regulation) Amendment Bill, 2015 was introduced in Lok Sabha on February 24, 2015. The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957. The Bill replaces the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 promulgated on January 12, 2015. The Mines and Minerals (Development and Regulation) Act, 1957 regulates the mining sector in India and specifies the requirement for obtaining and granting mining leases for mining operations. The Bill adds a new Fourth Schedule to the Act. It includes bauxite, iron ore, limestone and manganese ore and are defined as notified minerals. The central government may, by notification, amend this Schedule. The Bill creates a new category of mining license i.e. the prospecting license-cum-mining lease, which is a two stage-concession for the purpose of undertaking prospecting operations (exploring or proving mineral deposits), followed by mining operations.
Key highlights of Bill
Addition of new schedule- The bill adds a new 4th schedule in the parent Act to include mining of bauxite, iron ore, limestone and manganese ore as notified minerals.
Lease period- Bill has changed it for 50 years, as against present 30 years for all minerals other than coal, lignite and atomic minerals. While, there is no provision for renewal of mining concessions, unlike the parent Act.
Auction of notified and other minerals- State governments will grant mining leases and prospecting licence-cum-mining leases along with approval of Union government. In this case, Union government will prescribe the terms and conditions for selection of bidders as also the procedure for auctions.
Maximum area for mining- Union government is permitted to increase the area allowed for mining, instead of granting additional leases as per parent Act. Union government may reserve some mines exclusively for some specific purposes.
Institutions- District Mineral Foundation (DMF) to be set up in mining areas affected by mining operations to address local area grievances. National Mineral Exploration Trust (NMET) to be set up for regional and pan-India planning and detailed mine exploration.
Shortly after the bill on mining, the Rajya Sabha also passed the Coal Mines (Special Provisions) Bill 2015 on Friday, the last day of the first half of Parliament’s Budget session. In a repeat of what happened with the Mines and Minerals (Development & Regulation) Amendment Bill 2015, the coal bill was also favoured by the Trinamool Congress, the Bahujan Samaj Party, the Biju Janata Dal, the Nationalist Congress Party, the Jharkhand Mukti Morcha, the Samajwadi Party and the AIADMK.
The coal bill was passed by a division vote – 107 in favour and 69 against. The opposition Congress and the Left voted against the bill while the Janata Dal-United and the Rashtriya Janata Dal abstained.
The Coal Mines (Special Provisions) Bill, 2014 was introduced in Lok Sabha on December 10, 2014 by the Minister of Coal, Mr. Piyush Goyal. It sought to amend the Coal Mines (Nationalisation) Act, 1973 and the Mines and Minerals (Development and Regulation) Act, 1957. The Bill replaces the Coal Mines (Special Provisions) Ordinance, 2014 that was promulgated on October 21, 2014.
Under the Coal Mines (Nationalisation) Act, 1973, coal mining was allowed for (i) government companies, (ii) companies that the government had sub-leased the mines to, and (iii) private companies engaged in a specified end-use such as power, iron and steel, cement and coal washing. The Bill seeks to enable private companies to mine coal for sale in the open market.
Key highlights of Bill
- The bill has provisions for allocation of coal mines through a transparent bidding process i.e e-auction.
- The e-auction of coal blocks will ensure the continuity in coal mining operations and promoting optimum utilization of coal resources.
- The bill also facilitates e-auction of coal blocks for private companies for captive use and allots mines directly to state and central Public Sector Undertakings (PSUs).
- It has provisions that propose strong measures for rehabilitation and compensation for displaced persons.
- The bill also provides for vesting of the right, title and interest over the land and mine infrastructure together with mining leases to successful bidders.
- The passage of the two Bills means the Modi Government has now managed to obtain Parliament’s approval for three of the four reform measures that were implemented through ordinances. The last one that waits Parliament’s nod is Land Acquisition Bill.
The enactment of the two laws allows transparent auction of mines, a process that has already begun. The ongoing auction has attracted aggressive bids, which will give states about Rs 2 lakh crore over the life of the mines that have been auctioned so far. Further, the auction process ends the opaque system of mine allotment, which drew sharp criticism from the Comptroller & Auditor General and contributed to the collapse in the authority and standing of the Manmohan Singh government. The allocation of all coal mines since 1993 was struck down by the Supreme Court in August last year.
In the coal sector, foreign companies with Indian subsidiaries will be eligible for commercial mining. This provision is expected to attract global mining giants and make the sector more competitive and cost-effective.
*Shubhendu Anand, a graduate of the Tata Institute of Social Sciences and currently a student of Law at University of Delhi, is a Research Associate at SPMRF.