Wednesday, October 25, 2006
‘Amend mining laws, fight poverty’
Tuesday October 24 2006 11:14 IST
BHUBANESWAR: Suitable amendments should be made to the mining laws to help fight poverty in the State, said former Andhra Pradesh-cadre IAS officer Jatish Chandra Mohanty.
Mohanty took voluntary retirement recently to work for poverty eradication in his home State Orissa.
With the current level of production, he reckoned, if mine lease holders are mandated to share 50 percent of their profit with the State Government, Orissa would get an additional revenue of about Rs 4,400 crore per annum.
The fund can be utilised in building rural infrastructure and providing livelihood avenues for the poor.
Addressing media persons here on Monday Mohanty said, ‘Mo samruddha Odisha’ campaign would be launched in the State soon and aims at complete eradication of poverty and improving the financial condition of its people.
Stating that the interests of local people are being overlooked by the Government while granting mining leases, he sought formulation of a mechanism where tribals can get five percent of the net profit of the company.
To this effect, he called for constitution of a mineral board and an expert committee to decide the cost and profit as per global market mechanism.
The Government, he said, should have overriding control over all kinds of minerals, excluding the strategic ones.
On raising the socio-economic status of the poor, Mohanty advocated an integral approach that would touch on all aspects of development and ensuring optimum utilisation of the available resources.
Retired IG of police B K Tripathy, former vice-chancellor of OUAT Iswar Mohapatra and former managing director of Orissa Mining Corporation B K Mohanty among others have pledged support to Mohanty.
Bhubaneswar, Oct 25. (PTI): A bureaucrat who quit the civil services to work for poverty eradication in Orissa has demanded the mining laws be suitably amended to fight the menace in mineral-rich states.
The central Government should amend laws to facilitate suitable profit from the mining sector through bidding by qualified parties. This step could generate additional annual revenue of Rs 4,400 crore from the present production level, Jatish Chandra Mohanty, a former IAS officer of Andhra Pradesh cadre, said here.
"With matching financial assistance from banks towards livelihood projects, it will be possible to reconstruct rural Orissa and eliminate poverty in five years," he told a news conference here on Monday.
The fund collected can be utilised to create rural infrastructure and livelihood avenues for 48 per cent of the people living below poverty line, he said.
Mohanty, along with some senior citizens and young activists, has also decided to launch an 'Odisha Mora, Khani Mora' (campaign for my developed Orissa) campaign and would submit a memorandum to Prime Minister Manmohan Singh with at least one crore signatures.
Claiming the State Government was ignoring public interest while granting mining leases, Mohanty said a mechanism was required to channel at least five per cent of the net profit of a company for public welfare.
"The additional revenue accruing from the mining sector should not make good the deficit of State finances, but be earmarked for livelihood projects for the poor", Mohanty said.
A draft letter to the Prime minister -- introducing the issue
Dr. Manmohan Singh,
Our beloved and esteemed Prime Minister of
We, the people of Orissa, appeal to you to change the Mining Laws of our country in a manner which will make it mandatory for the mining lease holders to share a minimum of 50% of their profit with the state. With the current production levels, our state Orissa would get additional revenue of about Rs 4400 crores per annum. This money will be exclusively used for creating the much needed rural infrastructure and for providing livelihood avenues for the hungry millions.
Sir, we have very high regard for you since as the then Finance Minister you saved our country at a very critical time with your rare wisdom on socio-economic development. With your benign intervention, you can help a poor state like Orissa to get rid of poverty and march on the path of prosperity.
As you are aware, our state Orissa with abundant natural and human resources has about 48% of its people living below the poverty line, the highest in the country. The story of south Orissa is still pathetic: here 87% of our brothers and sisters live in utter penury with a meager monthly family income of about Rs 500 compared to monthly income of Rs2000 required to cross the poverty line. In many places they live eating mango kernels, wild leaves and unhygienic roots of creepers grown in the jungle. Is it not shameful for Indians even after about 60 years of independence? The appalling and pathetic living conditions of the tribal and rural poor of Orissa are unthinkable in any progressive civil society. Orissa can no longer afford to slog with this situation when the country dreams of global positioning as a fast developing economy.
While the teeming millions suffer atrociously, a few individuals/companies with mining leases are earning in several crores as profit. Thus the ‘Rich’ is becoming richer and the ‘Poor’ is becoming poorer. It is to be appreciated that the people of Orissa own the land given on mining lease to these fortunate few. While they earn about Rs 650 – 1500 per ton of iron ore after all expenditures, they pay a paltry Rs 25 per ton to the state. Same is the case for other minerals (coal, bauxite, chromite, manganese ore) being extracted in the state. If this is compared with share cropping in agriculture, the owners get 35-50% of the gross produce from the sharecroppers, which accounts for more than 50% profit accruing to the sharecropper. Based on this principle, the mining lease holders must pay a minimum of 50% of their profit to the sate.
Again, the additional revenue to accrue from the mining industry should not make good the deficit of the state finances. This should be earmarked for livelihood projects for the poor, and infrastructure required for that purpose i.e. works concerning rural roads, water harvesting, afforestation, micro irrigation, environmental protection and others, which are not financed under the central schemes.
The sad plight of infrastructure is reflected in the roads in mining areas of Keonjhar and Sundargarh Districts which are so bad that vehicles can not move with more than 10 km/hour speed. In contrast the mine owners have exported from these two districts iron ore worth more than Rs 25000 crore during the last 3 years earning huge profits.
Poverty in Orissa can be wiped out with integrated development approach: area based planning covering every inch of land aiming at optimum productivity; dovetailing family based action plans into that (all the families BPL and APL included); encompassing the saturation concept; adequate investment for livelihood projects; ensuring all backward and forward linkages; providing handholding mechanism for 30 years; discouraging doling out syndrome; and ensuring better health, meaningful education, desired nutrition and ecological balance.
All these require investment of about Rs 1 lakh per family. For 40 lakhs poor families we have to mobilize Rs 40000 crores. With Rs 4400 crores additional resources from existing mineral production and matching bank finances, poverty can be wiped out from Orissa in 5 years time.
We are confident that you being an economist par excellence will appreciate our view points and take following actions as early as possible:
Amend the provisions of Mines Act & Rules incorporating the provisions mentioned below:
a) Minimum of 50% profit from mining industry must be paid to the State Govt. Auction should be conducted among qualified bidders so that the state gets maximum benefit;
b) An Expert Committee comprising representatives of Government, Mining Industry, and Academia (Mining Geologists/Mining Engineers/Mineral Economists) should decide the cost and profit in a transparent manner as per global market mechanism;
c) Everything being equal among private entrepreneurs and Government PSUs, preference will be given to Central and State PSUs in allotting mining leases;
d) The displaced persons in mine project affected areas should get about 5% of net profit of the Company every year;
e) Excepting for strategic minerals all controls concerning other minerals including coal must vest with the State Govt;
f) Balanced exploitation of mineral resources with long term perspective must be ensured;
g) Ecological preservation must be accorded utmost importance; and
h) Mineral Development Board must be constituted to oversee the above provisions. Experts and Social activists are to be members of the Board.
We sincerely hope that you will incorporate the above provisions in the proposed amendments to the Mining Act to serve the wider interests of the State Governments.
We are presenting this Memorandum in advance through His Excellency the Governor of Orissa. We will submit a signed memorandum by millions of Oriyas to you personally after taking due appointment from your office.
On behalf of the people of Orissa,
Prominent Members of “Mo Samruddha Odisha Abhiyan”