BackMines Act: NDA takes ordinance route again
Government uses executive powers to push through a key decision for the eighth time in seven months
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New Delhi: Prime Minister Narendra Modi on Monday chose the ordinance route to allow the auction of iron ore and other minerals, the eighth time the seven-month-old government used executive powers to push through a key decision, ignoring criticism that it is bypassing Parliament.
The government has been using executive powers—the latest one to amend the Mines and Minerals (Development and Regulation) Act, 1957—more frequently to set in motion the government’s economic reforms programme after the latest winter session of Parliament ended without votes on several important legislation as opposition parties disrupted the upper House of Parliament, where the ruling coalition lacks a majority. The government has issued four ordinances after Parliament’s winter session ended on 23 December.
The cabinet on Monday also cleared the Telecom Commission’s recommendations on the spectrum auction that is expected to begin next month, the government said in a statement.
The recommendations that have received approval include the reserve price, spectrum usage charge, validity and eligibility related to the sale of airwaves that is likely to start on 23 February.
The cabinet set the reserve price of the second-generation spectrum at ₹ 3,980 crore per megahertz (MHz) for 900MHz spectrum band to be sold in 18 circles; ₹ 2,191 crore per MHz for 1800MHz band spectrum in 20 circles and ₹ 3,646 crore for the 800MHz band spectrum that is mainly used by operators that use the rival CDMA technology standard. If all the spectrum is sold at the reserve price, the government stands to generate ₹ 64,840 crore.
The government will put up for sale 184MHz in the 900MHz band, 100.2MHz in the 1,800MHz band and 103.75MHz in the 800MHz band for sale.
There was, however, no official communication from the government on the approval for the ordinance.
News agency PTI reported, citing an unidentified government official, that the cabinet has approved promulgating an ordinance to auction iron ore and other minerals.
The ordinance, after it is approved by the President, would pave the way for introduction of competitive bidding for allocation of iron ore and other non-coal mines. The amendment to the law focuses on attracting private investment and latest technology and eliminating administrative delays. It will also enable the creation of district mineral funds for the welfare of the people affected by a mining project.
Industry lobby group Federation of Indian Mineral Industries has been opposing auctions, saying it would sound the “death knell" for the industry and may lead to cartelization and waste.
The mining sector is facing several issues, including a ban in certain states for the past few years. The previous United Progressive Alliance government had brought in a bill in 2011 to amend the Act. But the bill lapsed with the dissolution of the Lok Sabha last year. The new government later prepared a draft amendment bill and put it up in the public domain for comments from stakeholders. Subsequently, the mines ministry had readied a new bill with a few changes from the earlier version.
Mining output grew 2.4% in the first seven months of the financial year (April-October) compared with a 2.6% contraction in the year-ago period.
Mines minister Narendra Singh Tomar had earlier said the amendments were required to kickstart the sector by removing bottlenecks that are preventing the industry from becoming a growth-multiplier in the country.
The auction of the so-called 3G spectrum in the 2,100MHz band is unclear as the Department of Telecommunications (DoT) is currently considering the Telecom Regulatory Authority of India recommendations regarding that band.
The telecom regulator, in its recommendations, had highlighted that given that the defence ministry had agreed to swap 15MHz of airwaves in the 2,100MHz band with the telecom department, the latter must club the 15MHz of 3G airwaves for sale together with the 2G spectrum.
The cabinet said that the government intends to auction some 3G spectrum in this auction.
“Cabinet also decided that intent to put 2,100 MHz to simultaneous auction may be announced along with auction of other bands. Details of this will be announced later on," the government statement on the cabinet decisions said. “The estimated revenues from this auction are ₹ 64,840 crore (excluding 2,100 MHz spectrum) of which ₹ 16,000 crore is expected to be realized in the current financial year," the statement added.
A senior DoT official said that the defence forces had agreed to release 5MHz of 2100Mhz spectrum in the next 45 days, paving the way for the government to auction the 3G spectrum along with the other three bands.
“Even if one block of spectrum in the 2,100 band is made available and the auction of the 2,100 band takes place simultaneously with the 900 spectrum auctions, we think it should be positive for the sector," Rajiv Sharma, telecoms Analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd, wrote in a Tuesday report.
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