Govt should ensure enough blocks for all: Naveen Jindal

Aggressive participation for far fewer blocks pushes up mineral prices and erodes the country’s competitiveness internationally, said Naveen Jindal, chairman of Jindal Steel and Power Ltd.

Speaking at the Minerals, Mining and Metals e-conclave, organised by the Bengal Chamber of Commerce & Industry on Thursday, Jindal said the country has too many entrepreneurs and there is too much competition for every block. The government also sometimes, creates an artificial scarcity by only leaving a few blocks of iron ore or coal, he added.

“When we are very aggressive about getting these minerals, we erode our competitiveness forever, because we are not only competing within the country but also internationally. The mineral, which is going to be our strength, is made so expensive that it loses to be our strength, and then, for the next five decades continue to pay high premiums and erode competitiveness internationally,” he stated.

‘Ensure blocks for all’

Jindal further said the government should ensure there are enough blocks for everyone as it charges a high royalty on all minerals.

“It (royalty) is the highest in the world — may be double or even up to five times — because there are many taxes in India — royalty, GST, compensation cess on coal, and then if you make profits you pay income tax. So with all this, the kind of support the mining companies require, is still lacking,” he pointed out.

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The State governments, who control things on ground, have a larger role to play and should create an enabling environment, as they stand to be the biggest beneficiary with the highest revenue. Other States should take lessons from Odisha and encourage mining, he added.

Need of the hour

With a vast base of mineral resources, India offers a huge opportunity. However, it would depend on how it is utilised. It is important to be smart enough to utilise the wealth of minerals rather than going for imports.

Mining and minerals would also play a role in achieving the $5-trillion economy, and the government has already initiated various measures and brought in amendments to make mining friendlier and easier.

“It is already contributing to 1.5 per cent of the GDP, and this can be doubled. With the opening up of commercial coal mining, I feel there is no need for India, which imports around ₹1.5-lakh crore worth of coal every year, to continue that, except for some coking coal,” he said.

However, there are a few challenges, especially when it comes to land acquisition, rehabilitation of people, and getting clearances. There should be a single window mechanism for obtaining clearances which would help speed up the process, he added.

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