By IANS
New Delhi : A Group of Ministers (GoM) Friday approved a new mining policy aimed at simplifying procedures and reducing bureaucratic control to attract more investment for one of the key sectors of the Indian economy.
"The policy will now be sent to the union cabinet for final approval," Minister of State for Mines T. Subbarami Reddy told reporters after the meeting.
He said the policy was likely to be tabled in the monsoon session of parliament for approval.
The GoM, headed by Home Minister Shivraj V. Patil, gives states having mines and metal reserves the right to impose royalty of their choice to help them generate higher revenues.
"The policy aims at enhancing the exploration of mining and metals to over 25 percent of the total reserved area from less than 5 percent now. It will also empower all states having mines and metals reserves to impose royalty of their choice on mineral wealth to help them generate higher revenues," Reddy said.
He said the government was eyeing an annual investment of minimum two billion dollars in the metals and mining sector and expected the new policy to create 500,000 additional jobs in the next five years.
The government has been particularly concerned over far and few investments coming up in the mining sector. Till 2004, only 14 proposals were cleared by the Foreign Investment Promotion Board (FIPB). Except exploration of certain classified minerals, the government has allowed foreign investment in the sector through the automatic route.
"We want to increase metals and mining sector's contribution to the GDP which at present stands at just 2.8 percent, with just five percent of the country's mineral wealth being explored. Indian players should collaborate with foreign players to further explore this mineral wealth," Reddy said.
Last July, a committee recommended changes to make it easier to grant permits for surveying, prospecting and leasing of mines.
The new policy doesn't propose any restriction on iron ore exports, Mines Minister Sisram Ola said. "We have not proposed any cap on iron ore exports. Exports would be freely allowed," he said.
While domestic steel companies are seeking a ban on iron ore exports to have greater access to the steel-making raw material, the mining companies want to continue with overseas sales.