FDI in mining sector: Don’t ignore displaced

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FDI in mining sector: Don’t ignore displaced

Saturday, 24 November 2018 | MANAS JENA

Odisha has a natural advantage of availability of substantial reserve of varieties of mineral resources along with port facilities. From the very beginning of planned economic intervention, mining and extractive industries have been patronised by the State and the trend also has been continuing till now.

 A favorable FDI policy for mineral sector, with 100 per cent direct investment through automatic route, an auction system and a longer period of lease, is a prove of this.

The investment conclave by Government facilitates smooth entry of corporates and so, in the coming days there will be more FDI to mineral sector of the State. It is equally important for the Government to see its various impacts while inviting new investors.

The question is what has been the experience of the State with last 70 years of extractive industry? How these industries have contributed to the growth of the State economy and more specific to the economic development of the people in and around mining areas and the mining workers in terms of their income, quality of life and environmental sustainability. While moving forward, these questions need to be answered in the interest of the people of the State.

Experience shows mechanisation of mining has drastically reduced the employment scope of the local manual labourers. The condition of casual workers in mining areas has no way improved. The Odisha Economic Survey reports that employment in mining sector has not increased much due to a number of reasons though the production of minerals has increased.

The State is divided into 12 zones having minerals with a sizable reserve of iron ore, coal, bauxite and chromite. Barring the OMC and other State level private companies, the public sector companies such as SAIL, MCL, Nalco, NTPC and IRE and mega national level private companies such as Tata and Birla are the major beneficiaries of mineral resources of the State in post independent era and now many international firms such as RTZ, Mittal etc are joining in mining sector of the State.

It is a fact that these most profitable companies have created very minimal employment for the State but at the same time, they have hugely been supported in terms of land at low cost, water supply, electricity, infrastructure, transportation facilities and above all, minerals lease for a long time. The supplementary expenses by the State in backing the corporates is made out of public fund in the plea of development and employment generation. Nowhere has the cost and benefit analysis been done to inform the public. In the coming days with ongoing increasing trend of disinvestment of PSUs, the private corporates will be the sole players of mineral sector.

The State gets only royalty from the extractive industries which is very nominal percentage of the sale cost of the minerals. Except minor minerals, the fixation of royalty is vested with the Central Government and the past experience shows the royalty rate has been very lower and there has been delay in regular revision affecting the mineral bearing States such as Odisha. But there is no change in regular royalty revision process.

Illegal mining is encouraged by many vested interest groups, mafias, criminals with political and bureaucratic nexus to siphon off the resources and control law and order of the locality. The issue of illegal mining and theft and pilferage of minerals are not under control which is a major cause of loss of non –tax revenue from mineral sector. The State has been struggling with debt almost nearer to its annual income. Due to lack of resources, the State has not been able to continue many social welfare schemes. Besides, a dismal job sector stares it on face with about 1.32 lakh posts in Government lying vacant. 

One of the major concerns that remains unaddressed in the State is mining related displacement and rehabilitation issues. Thousands of families displaced by mining and mineral based industrial projects are very badly compensated and poorly rehabilitated. Particularly, the land issue for the displaced families has not been sorted out by the Government while the availability of land in mining areas grows scanty.

The unfinished survey and settlement work and possibility of distribution of forest land and its utilisation will be more challenging in mineral reserve areas of the State which is primarily affecting the interest of STs and other traditional forest dwellers.

It is already found that the scope of traditional seasonal employment in agriculture, forest related activities, fishing and animal husbandry in mining areas has been drastically reduced due to impact of mining that pollutes water, air and soil of the locality and also due to continued deforestation and loss of grazing land. Illegal mining has been a major cause of deforestation as it violates compensatory afforestation provisions.

No pollution laws and damage control measures are being followed to save the environment of the locality. It has wide impact over food security and living condition of the locals who are otherwise not employed in mines.

Take for example the districts of Sundargarh and Keonjhar having highest number of mining leases for last 70 years where distress migration of local youths is rampant. The quality of life of the people has not been developed; even some of the basic amenities such as drinking water, sanitation, housing and electricity are not available to local people in the mining areas. The Scheduled Tribes and Scheduled Castes and other marginalised mining affected families of the districts are still grappling with underdevelopment.

As a legal provision, the mining royalty collected from the companies must be spent on the development of the people of the State, specifically in the mining affected areas but the fact is that the funds collected under royalty by State and District Mineral Foundation (DMF) at district level largely remain unspent and the DMF funds are being spent by violating the provisions. The funds available at district level for the local affected people are diverted for other purposes.

It is a criminal negligence towards affected people of mining areas by denying them of genuine rights and entitlements. The mining affected people are never consulted by the district administration while deciding over the spending of DMF funds and the basic human priorities of the local people are ignored. The status of access to drinking water, healthcare and primary education system is worst in almost all mining areas. A few months back the distress condition of STs of Nagada village in Sukinda chrome valley of Jajpur district had created  lot of public outrage and condemnation against the apathy of the Government.

It is unfortunate that common people living over the resources are starving without basic minimum for life and suffer in hunger and malnutrition. The basic services of the Government under different schemes are not reaching to them and there has been no improvement in their life. The economic policy of the Government supports FDI in mining sector and the Government invites companies with red carpet to invest in the State. So in the coming days the life of the local poor people in mining areas will be more deplorable in the absence of a pro-people centered policy of the Government.

(manasbbsr15@gmail.com )

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