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Journalism of Courage
Indias stronger-than-exp-ected GDP growth numbers,7.4 per cent overall,are driven by a couple of sectors in particular. One of those is manufacturing,which rebounded off a particularly low base to grow 16.3 per cent in the last quarter. Another was mining,which grew by 14 per cent. Thats a good sign: it means that the demand for raw materials has picked up,showing that a recovery is well and truly on. But it also underlines the continuing importance of the mining sector to the India growth story.
It is important,therefore,to look at whether this sort of growth is sustainable. Much attention is focused on environmental considerations. But that is probably a sidelight. Two other developments appear capable of really revolutionising mining,and thus pushing industry overall. First,the long-overdue revisiting of the Coal Mines Nationalisation Amendment Bill. This was drafted by the NDA government a decade ago,and shelved by one of the NDAs eight coal ministers. The UPA dilly-dallied over setting up a GoM to get things moving. Ending the wasteful,complex and politicised system of captive mining,in which the product of a mine is tied to a single project,and opening the mine sector to all private players would massively improve profitabi-lity and transparency.
Also effective,and more of a low-hanging fruit,is the internationalisation of Indian mining companies,to protect domestic manufacturers from price volatility and to increase the security of supply. A recent spike in coking coal prices that affected the steel industry has given this argument some urgency. In response,SAIL announced it would look for assets abroad. Internationalisation and privatisation are the two areas where those who wish to push for increasing the supply of raw materials to Indias booming economy should really be focusing their attention.
