Encouraging Make in India for the steel sector, promoting research and development and tie-ups with foreign players to produce high quality products are the top priorities for Union Minister of Steel and Mines Narendra Singh Tomar. He talks to Aparna Sengupta
What do you think about the performance of this Government in last one yearIJ
During the general election of 2014, the country was going through a phase of depression. The common man was surrounded by an atmosphere of distrust, corruption, economic instability and growing unemployment. Citizens of India entrusted their faith in a Government led by Narendra Modi. As the Prime Minister, he was faced with burgeoning expectations and challenges. Modiji not only conquered these challenges with his unmatched personality, leadership and diligence but also pushed ahead all-encompassing welfare initiatives and won the confidence of the entire nation. The first year of Modi governance is full of achievements and has met all expectations of public at large.
Before taking charge as the Prime Minister, Modi had explicitly stated that his government will be dedicated to the common man, the poor and the deprived. He translated precept into practice within a year’s time. Over 15 crore farmer families were brought under the fold of banking through Pradhan Mantri Jan Dhan Yojana. Pradhan Mantri Suraksha Beema Yojana, Pradhan Mantri Jeevan Jyoti Beema Yojana, Atal Pension Yojana, Rs1,000 Minimum Pension Scheme, Mudra Bank Scheme, Beti Bachao Beti Padhao, Sukanya Yojana, Smart Card to 45 crore workers, Pradhan Mantri Rozgar Yojana and Rashtriya Swasthya Beema Yojana testify this Government’s commitment to the upliftment of the poor.
The vibrant and dynamic leadership provided by Modi has not only given a good direction to the country, but has also enhanced India’s image in the eyes of neighbouring countries and other nations. After assuming charge as the Prime Minister, he has visited 18 countries, which has triggered a wave of enthusiasm and optimism for India, among all stakeholders. Investors are looking at us with renewed vigour. The economy’s Gross Domestic Product (GDP), which is a reliable pointer to nation’s growth, has risen from five per cent to 7.4 per cent. It is not a mere coincidence that inflation, which could not be contained in the last 10 years, has come down from a level of 10 per cent to less than five per cent. The Government is creating a conducive environment for growth of industry, which will soon turn the dream of ‘Make in India’ into a throbbing reality.
This Government is committed to the all-round social and economic development of India. While on one hand, the auction of coal blocks fetched two lakh crore to the official exchequer, schemes like Minimum Pension Scheme, Jan Dhan Yojana, Atal Pension Scheme et al. tried to bring in more and more Indians under the social security net, connecting them with the mainstream of development. To distribute the fruits of development to all corners of the country, initiatives like Smart City, Housing for All, Swachchh Bharat Abhiyan et al. have also been introduced. The intent behind all these initiatives is that governance should be based on sound and transparent fundamentals, quality of life should be better for all citizens and it should be easy for investors to do business in India. These initiatives are together geared to bring to reality the ‘Sabka Sath Sabka Vikas’ motto of this government.
In terms of population, India is probably among the youngest nations of the world. Nearly 50 per cent of our labour force is aged between 15 to 29 years. Even though the rate of economic growth in India has been around eight per cent, employment has grown only by one per cent. Every year, nearly one crore youth join the labour force of this country. It is evident that unemployment, particularly youth unemployment, is emerging as a major problem in the country. To tackle with this socio-economic phenomenon, the growth of multi-faceted industries is important, so as to generate gainful employment opportunities on a broad scale. Modiji has given due importance to this concern by establishing a completely new Ministry for Skill and Entrepreneurship Development.
This government has given priority to the welfare of farmers. Work is in progress to distribute soil health cards to 14 crore farmers across the country. Earlier, those farmers who lost 50 per cent of their produce to natural calamity got compensation from the government. Now, even those who lose 30 per cent of their crops to such disasters will be compensated for. The government has also acknowledged untimely rain and hail as calamities and has increased the compensation to farmers in such cases by 1.5 times. Another Rs5,300 crore has been set apart for Prime Minister’s Irrigation Plan. To empower workers in the country, smart cards are being distributed to 45 crore labours. This will help them avail of benefits under Old-Age Pension Scheme, Aam Aadmi Pension Scheme and Rashtriya Swasthya Yojana.
The level of commitment shown by Modi government can be easily assessed by the amount of business transacted in both houses with each passing over two dozen bills in the 2015 Budget Session, the highest in last five years. Even the detractors of current regime have come to accept that India is no longer grappling with the policy paralysis that had ensnared it earlier.
In present times, Congress has been rendered altogether irrelevant. There is a gaping hole of leadership in the lost and depressed party. They have been using specious logic and baseless allegations to level charges against Modiji and his government. There is no leader in Congress who can lead the way to the future. Each member in the party is mired in his own vested interest and is least interested in the growth of this country or eradicating poverty. Rahul-launching has already failed thrice and the latest comeback is also not destined for success. It is in everybody’s knowledge that Congress has ruled this country unilaterally for the last 50 years. If the country is still struggling with poverty, unemployment and backwardness, Congress is to be blamed for it to a large extent.
What are the new initiatives you have taken for the Ministry of Mines in the last one yearIJ
As far as mining is concerned, we have tried to infuse life in the sector by bringing in MMDR Amendment Act, 2015. This will give mining activities a fillip and will replace the pessimism and slowdown in this sector with optimism and buoyancy. There are five main aspects to this Amendment which I would like to bring forth the citizens of the country:
1. By amending the Act, we have introduced Auction as the only way of granting mining concessions, which is bound to bring transparency, fair-play and clarity in the concession process. This will also boost investor confidence, incentivising investment in this sector. Furthermore, we have extended the lease period to 50 years, thereby granting security of tenure to miners, who will no longer be driven from pillar to post for the tardy process of lease renewals.
2. Despite being a minerally rich country, India has not been able to register its mining presence on a global scale. In contrast, geologically similar countries such as Australia and Canada have left India far behind in the mining sector. If this backwardness can be ascribed to one major reason, it will be under-exploration. In India, geo-physical mapping has been completed in only 15 per cent of the area of Obvious Geological Potential (OGP). Mining activities are being carried out only in one per cent of this OGP area, which again, is very disappointing. In fact, exploration is one such activity which actually grows the reserves of the country. For example, the known reserves of iron ore in Australia have grown a 100 fold in the last 40 years. Had India devoted due time and attention to exploration, the mining sector would have solved the unemployment conundrum to a great extent.
Now that auction has been introduced to dispose mining leases, exploration is no longer a choice, but a necessity, since mining blocks will be notified for auction only after conducting necessary exploration work.
It is for these reasons that we have turned our attention towards exploration. Through the latest Amendment, we have established a National Mineral Exploration Trust, which will be financed by an amount equivalent to two per cent of the royalty paid by leaseholders (at the existing rates of royalty, an amount of Rs300 crore per year is expected to accrue to this Trust). Other than GSI and MECl, seven more PSUs have been notified to carry out prospecting work in the country, which includes Rashtriya Ispat Nigam limited, Steel Authority of India limited, NMDC limited, KIOCl limited, MOIl limited, Chhattisgarh Mineral Development Foundation and Madhya Pradesh State Mining Corporation limited. The process for transfer of leases has been simplified, which is expected to attract exploration companies to carry out detailed exploration to establish resources. Provision has also been made for granting Non-Exclusive Reconnaissance Permits so as to invite participation of exploration experts in exploring India better.
3. It is worth mentioning that in the 66 years of Independence, no government has previously expanded their resources on the welfare of mining affected people and places. Predominantly occupied by Scheduled Tribes, these areas had suffered neglect and no mechanism was evolved to cater to their needs. The present government has provided for the establishment of District Mineral Foundation (DMF), with the express purpose of increasing the standard of lives of mining affected people. Existing miners will contribute an amount equivalent to the royalty towards DMF, whereas new miners will contribute an amount limited to one-third of royalty. It is estimated that DMF will receive Rs10,000 crore on an annual basis.
4. The spectre of illegal mining has threatened the growth of this sector in the past. In the latest MMDR Amendment Act, 2015, we have dealt with illegal mining in all seriousness by raising the penalty from Rs25,000 to Rs5 lakh per hectare and imprisonment from two to five years.
5. In line with Modiji’s vision of promoting Cooperative Federalism, we have further empowered state government with the twin goal of devolving power and expediting mining process:
a. The prior approval of central government, in case of 10 major minerals, has been done away with.
b. Soon after this government took charge, the royalty rates of minerals were revised which had been pending for the past five years. By this move alone, the revenue received by states as royalty is expected to increase from Rs9,400 crore to Rs13,300 crore. In a few states, this rise is expected to be of the tune of 45 per cent.
c. Earlier, each mining plan had to be approved by the centre. Now, if a mining plan has been prepared in conformation with mining guidelines issued by IBM, then state governments are free to approve the plan at their level. This is expected to save at least one year in the process of obtaining necessary approvals.
What steps have been taken to re-energise the steel industryIJ Can you also indicate some of the new initiatives you have taken for the Ministry of Steel in the last one yearIJ
Since steel is a deregulated sector, the role of Steel Ministry is limited to that of a facilitator and coordinator. We have proactively interacted with related Ministries and states, in order to meet the demand of indigenous steel producers. As per figures released by World Steel Association, for the period January-April 2015, India has become the third largest steel producer in the world, leaving behind America. Our target is to reach second position by year 2020.
In the last year, we paid special emphasis on timely completion of modernisation and expansion activities of PSUs under the Ministry of Steel. On April 1, Modiji dedicated to the nation the modernised and expanded steel plant of Steel Authority of India limited (SAIl) in Rourkela. He also dedicated the modernised steel plant of SAIl, IISCO Steel Plant, Burnpur to the larger good of the country. The steel plants of SAIl are being expanded from a capacity of 13 million tonnes per annum (MTPA) to 23 MTPA with an investment of Rs61,000 crore. The long term vision is to take SAIl’s capacity up to 50 MTPA by 2025, with an estimated investment of Rs1,50,000 crore. On May 22, SAIl signed an MoU with Arcelor Mittal to set up a state-of-the-art Cold Rolling Mill in India to cater to the growing and sophisticated automobile industry in the country. The government aims to take Indian steel production to a level of 300 MTPA by 2025. To aid research and development in the area of steel, the Ministry has also set up Steel Research and Technology Mission of India with an initial fund of Rs200 crore. We are exhorting Indian steel companies to tie up with foreign players in order to produce high quality steel products domestically. This will help curb increasing import of steel products in India.
With a view to increase steel production and encourage Make in India for steel sector, we are also working on special purpose vehicle (SPV) dedicated to the steel industry. In the first phase, we are targeting to establish steel plants through the SPV route in Chhattisgarh, Odisha, Jharkhand and Karnataka. On May 9, an MoU for setting up SPV in Chhattisgarh was signed in the presence of Narendra Modiji. Finalisation of agreements for SPVs in other states are also underway.