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In the last week of December, Prime Minister Narendra Modi spent a lot of time with union ministers, secretaries, state government officials and business leaders at a one-day Make in India workshop. For the first time, one ministry got to know about the detailed plans of other ministries. It was quite a departure from the usual practice of the ministries being ‘secretive’ about their strategies.
The extensive deliberations at the workshop took place through 18 sectoral sub-groups.
At the end, there were individual presentations by each of these groups for the prime minister. Union minister for steel and mines Narendra Singh Tomar who was a part of the one sub-group, later spoke to the Free Press Journal at length. Excerpts from the interview:
Anil Sharma
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How did the Make in India workshop go?
The workshop was an exercise to give a concrete shape to the idea of Make in India. It had the participation of union ministers, secretaries to ministries concerned, chief secretaries of states, business leaders and experts from commercial sectors. It had quite a broad-based participation. There were 18 groups for different sectors and I was in the group for steel and mines.
What was the procedure for these sub-groups?
Each sub-group spent about two to two-and -half hours and discussed everything threadbare about their respective sectors. The problems were discussed and the plans to set it in order were also examined. After that there were 23 presentations and each of these was seen by prime minister. He was fully appreciative of this exercise.
What has emerged about the steel and mining sectors?
There was a consensus that both mining and steel sector should grow. Right now there is a near stagnation in the mining sector. There are a few reasons for this situation.
Can you elaborate on this?
In the recent past, the manner in which mining cases should have been expeditiously disposed of has not taken place. We do not want to get into a blame game, but then clearly, there was a lack of political will on the part of the previous government to take decisions.
Was it influenced by the cases of illegal mining coming to light?
Surely, the extent to which instances of illegal mining activity came to light had led to the setting up of the Shah Commission and the intervention of the Supreme Court. There were observations by these two bodies and some guidelines were also issued. Now, the previous government should have made the necessary efforts to move ahead and take the corrective steps. But this did not happen, and the result was stagnation.
Then what about the efforts of your government?
We have come to power with a determination to end the slackness in decision making and to that end after taking charge we first tried to find a way out from the situation in the light of the verdict of the Shah Commission and the observations of the Supreme Court.
We framed new guidelines in the light of these decisions and tried to resolve many cases. But then the situation was not conducive to make too many changes, and not much of a headway was feasible.
So what changes are you proposing in the MMDR Act?
After this exercise, it was our assessment and also that of the stakeholders that without major changes in the MMDR Act, not much of a headway is feasible. The sector would not gain its growth momentum without it. It is only after these changes, that the mining sector would become transparent, and it would get the required boost.
There was a lack of political will on the part of the previous government to take decisions
How do you look at the present industry scenario?
At present, there is an increase in the prices of iron ore, because of the shortage of the material. These prices are also impacted by global conditions, however due to the domestic scarcity of iron ore, the prices have shot up and the steel industry has been gripped by a crisis. So, the industry is facing a tough time as it has to source the iron ore at higher prices. This is the fate of large units. In so far as the smaller units are concerned, their position is all the more difficult. The situation has been complicated by the fact that in the same period, China has dumped the market with both iron ore and steel. The fact of global competition is also a reality.
But this sector has always been known for arbitrary decisions and political favouritism?
Once we introduce a transparent system of allocation based on auctions, the scope of favouritism, discretion, and arbitrariness would be eliminated. People shall have a clear idea that anyone who wishes to get into the mining business has to follow this path to succeed. Now even those who are influential have doubts about succeeding in this business. As for those who lack such influence, they are really at God’s mercy.
How confident are you about achieving these objectives?
All our changes are from this standpoint, and once these have been put into the legal framework, we are confident that we shall be able to restart the mining sector. We have also had discussion with the state governments, and we are now confident about getting the momentum back.
What is your priority in amending the MMDR Act?
The BJP government and prime minister Narendra Modi have accorded top priority to transparency. From this stand point, we are engaged in an exercise to amend the MMDR act, and within a few days these changes shall be incorporated into the legal framework. We are making all efforts to ensure that the process of allotment should be through auction. This would ensure transparency and higher revenue to the government.
The availability of ore should go up and the production of value added goods must increase
Don’t you have plans to counter the China syndrome?
We are also working in collaboration with the finance ministry to look at options to control dumping from China.
After the changes in MMDR Act, what are your long and short-term goals?
Our objectives are very clear. Two things should happen both in the long and short term. The availability of ore should go up and the production of value added goods must increase. In specific terms, the availability of iron ore and other minerals in the country should increase. We should also be able to enhance the process of value added products like steel in the country. All of our actions are geared to meeting these objectives. The steel industry should get as much encouragement as possible. It should be easier for them to enhance their production. The availability of coking coal and thermal coal should go up. We have discussed this issue at the Make in India workshop as well.
What is the outlook in so far as SAIL is concerned?
The expansion of SAIL has been under way for quite some time. But it was at a slow pace. In the last six months, we have paid attention to this aspect, and have expedited it. Now as a result of this, both Rourkela and Warnapur ( West Bengal) expansion programmes have been completed and we are in a position to add 8 million tonnes to the aggregate capacity. Other modernisation and capacity expansion plans shall be completed in 2015, and we have put in measures to ensure the completion of these plans.
What are the steps for removing input constraints?
To increase the availability of coking coal, we have set up a new company with SAIL, RINL and NMDC as partners that has acquired a coal mine in Mozambique. We shall also try to enter others in the same way.
Any new projects on the drawing board?
We have also put in place a plan to create a special purpose vehicle in each of these states-Jharkhand, Odisha, Karnataka and Chhattisgarh-with SAIL, NMDC and a state PSU for setting up four large steel plants. It is also envisaged that the states shall offer land and mines for these projects, and there could be involvement of private partners. These plants will lead to employment generation as well as the natural growth of new cities that come up with such new plants.
What about your plans for NMDC-a cash-rich company?
Right now, NMDC has a production of 30 million tonnes, and we have now given it a target to add at least 45 million tonnes in the next three years. The entire plan has been worked out. We are a government company and we have the responsibility to increase the production. We have the mines and we have the resources. We feel confident that we shall be able to do it.
What about the existing mines in the private sector?
We are also confident that once the MMDR Act is changed then the present difficulties for those who are working in this sector would be removed. Once these difficulties are removed, there would be a natural momentum for the sector and the country as a whole would stand to gain in 2015.
