New Delhi: Government's decision to propose the auction route for allocation of mines has been taken after consulting state Chief Ministers, Mines Secretary Anup K Pujari said.
"Since the Chief Ministers and other ministers are not very comfortable with having any discretion in the allocation process, we have now brought a system by which all allocation will be done through the auction route," Pujari said at an event organised by CII here. Seeking to amend the Mines and Minerals (Development and Regulation) Act, 1957, the Mines Ministry has come out with a draft amendment Bill with provisions for auctioning all types of minerals including iron ore and bauxite. Stating that there would be two types of auction, aimed at unbundling the sector, Pujari said for one type there would be auctioning of mining lease while there would be auction of prospecting-cum-mining lease for minerals situated deep in the earth's crust.
Tata Steel Managing Director T V Narendran, who was also present at the event, said though the auction route would bring in more transparency into the allocation process, it would lead to hike in the cost of owning raw material assets. "I think auctioning brings more transparency into the process. But I think it is going to increase the cost of owning raw material which in the long-term is not so great for India as competency of the country may get affected," he said. The proposed auction route has already faced its share of criticism from Federation of Indian Mineral Industries (FIMI).
It recently said auctioning of mines as proposed in the draft Bill will sound the death knell of the industry. It also wrote to Prime Minister Narendra Modi expressing concerns. Contending that the auction route was not pursued in any resource-rich country, FIMI said, these nations follow the time-tested principle of 'first-cum-first-served'.
