Industry body Assocham has suggested the formulation of a natural resources policy and a natural resources regulator to ensure a transparent, and accountable auction-based mechanism for allocation of high-value resources.

“It is clear the Coal India Ltd does not have capacity to meet the current and projected energy demand for India and that the greater involvement of private sector is inevitable. Given this, it becomes important to focus on introducing a series of policy reforms which correct various impediments observed in introducing competition in the sector,” the industry chamber said on Thursday.

According to the chamber’s research, contribution of the mining sector to the GDP has remained largely stagnant due to low spending on exploration.

“India produces as many as 87 minerals, which includes four fuel, 10 metallic, 47 non-metallic, three atomic and 23 minor minerals. The total value o mineral produced in 2012-13 was ₹ 2,22,747 crore or 2.4 per cent of the GDP,” Assocham said.

“Exploration in India is currently done to an average depth of 50-100 meter for all the minerals as compared to 300 meter in Australia despite 1,000 meter drills being available in the country,” the chamber said.

Assocham also called for limited incentives to be provided for the private sector to invest in improvement of technology and equipment in mining projects as the mining industry is one of the higher taxed industries in India.

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