Opinion | Find, produce and consume in India will get a boost3 min read . Updated: 24 May 2019, 01:07 AM IST
Such is the scale of India’s needs that in times to come, all that we find in India will sell in India
I congratulate Prime Minister (PM) Narendra Modi for the National Democratic Alliance’s (NDA’s) emphatic victory in the 2019 elections and the results show the pro-incumbency mood of the nation. Voters have endorsed Modi’s decisive leadership, his government’s multiple schemes to pull out millions from abject poverty and provide them essential services like electricity, cooking gas, bank accounts and free health services.
Above all, his ability to run a clean government and ensure that every single rupee reaches only the beneficiary has played a key role in NDA’s return to power.
That said, the government will now re-ignite its reforms agenda to push growth, tackle critical issues like creating even more jobs, usher in more tax-friendly laws, strengthen India’s position in global trade while protecting domestic industry from dumping and create a more conducive environment to attract foreign direct investment (FDI) in critical segments like mining and oil & gas (O&G). Given India’s rich and diverse geology, it is the right time for the country to have a mining revolution. The sector has the potential to take its contribution to overall gross domestic product (GDP) from the current 2% to 10%, plug imports of non-essential metals and minerals, and generate millions of new jobs.
India’s goal to bring down its crude oil imports by 10% by 2022 will be achieved as policies and legislation are becoming conducive to ensuring greater investment in the natural resources sector to make India self-sufficient and take away its dependency on imports. Domestic crude oil attracts a high cess rate of 20%. Ironically, imported crude oil is not even taxed. If the cess rate on domestic crude is reduced to 8%, it will provide an incentive to the industry to produce more, reduce imports, save forex and encourage more companies to enter the O&G landscape.
Urbanization and infrastructure development will continue to generate demand for natural resources, including commodities where our company is a leading producer. Such is the scale of the nation’s needs that we believe that in times to come, everything that we find in India will sell in India.
Our country has similar geology such as Brazil and Australia, where natural gas sector contributes 8-10% of the GDP, however in India, the sector contributes only around 2%. The new government had realized the importance of manufacturing natural resources and their intentions were tremendous from day one. They have created the right policy and framework that will be beneficial and supportive towards business. Having said that, there is still room for simplification in policies such as giving the power of public decision making in the hand of collector and making them the business development manager.
I still believe that “Find in India" is a possibility, considering the rapid growth in innovation and technology today, as well as the money available, we can definitely take this initiative forward. The government’s involvement in a fundamental sector such as natural resources will require way more effort in order to overcome some of the challenges.
What if we can’t go to the border to fight like a soldier, but we can produce 50% of India’s oil and most of mineral and metals to make India self-sufficient in natural resources. We can serve the nation in many different ways.
The recently approved National Mineral Policy (NMP) will ensure more effective regulation. It is expected to lead to sustainable mining sector development in future while addressing the issues of project affected persons especially those residing in tribal areas. Growth in mining will give rise to employment opportunities in both government and private sector companies across multiple roles.
The NMP 2019 aims to attract private investment through incentives, while efforts would be made to maintain a database of mineral resources and tenements under mining tenement systems. However, it will bear fruit once necessary amendments in the Mines and Minerals (Development and Regulation) Act and environmental clearance/ forest clearance (EC/FC) Procedures are carried out, which will lead to huge investments and employment generation in the Resources sector.
Global players should be given strong incentives to set up and invest in exploration and production of natural resources: mining of minerals and metals. Thousands of small and medium enterprises will emerge to process these raw materials, benefitting our country immensely. And lastly, a development-focused authority should be instituted for the mining industry, which can regulate, promote and ensure an orderly growth of the industry, similar to Insurance Regulatory and Development Authority (Irdai). Problems like illegal mining, environment, sustainability; ambiguity in policy etc. can be sorted out sooner and more efficiently if a dedicated authority is operational.
I look forward to PM Modi’s progressive second inning.
Anil Agarwal is the founder and executive chairman of Vedanta Resources Ltd.