SATURDAY, APRIL 27, 2024
Alexandre Moniz Barbosa
Goa’s mining sector is a unique case study. In the early years, mining was seen as the best thing to have happened to the State. It created employment, it brought revenue and the main players invested in corporate social responsibility, before CSR became fashionable. Then the shadow of breaking environment laws darkened the sector and it wasn’t long before the dark clouds of illegal mining completely obfuscated the sector. That’s when mining came to a halt and reached crossroads where it got stuck for a long period, uncertain of which fork to take. The government, after much thinking and prodding by the stakeholders in the sector to take a decision, finally decided to take the path of forming a mining corporation to resurrect the sector that has been covered in the dust of illegal mining controversy. Ironically, this was the very option that Goa Foundation had suggested even a couple of years ago, stating that it would allow resumption of activities in the silent pits without having to auction the mining leases.
On March 24, presenting the State Budget in the Assembly, Chief Minister Dr Pramod Sawant surprised everybody with the announcement that the government was proposing to set up the Goa State Mining Corporation to revive the sector that has remained dormant since 2018 after the Supreme Court judgment of February 7, 2018 had set aside the second renewals granted to 88 mining leases. At that time, the Court had asked the State to initiate process to grant fresh leases, but the State explored many other options in the intervening three years. Later the same evening that he presented the Budget, speaking to the media the Chief Minister announced that a Bill for the formation of the corporation would be introduced during the Budget session itself, displaying hurry that was otherwise unseen. Just days later, the Assembly session was hurriedly adjourned to July, and the House passed a vote on account for five months to allow the government to tide over the finances of the State, until the session is reconvened during the monsoon.
The adjournment came hours after the State Election Commission announced the schedule for the civic elections to five councils. What happened due to this is that the Bill that would have paved the way for the formation of the corporation was not introduced, which is a stumbling block to the plans of the government to start the mining corporation. Yet, last week, the Chief Minister set a deadline by which the mining corporation will be functional, and the date for this is Statehood Day, May 30, 2021. In the absence of an Act that would give legal sanctity to the new corporation, the only way in which the government can incorporate the new corporation is by promulgating an Ordinance which would then have to be cleared by the House when it meets in July-August. Goa, therefore is set to get a mining corporation that will be the outcome of an Ordinance, and not of a Bill introduced and passed in the Assembly after discussion.
So, the absence of an Act, as the State Legislature has not passed the Bill to incorporate the corporation, may be met by promulgating an ordinance, but there are other hurdles on the path that may not be so easy to clear. For instance, while announcing the plan for the formation of the Goa State Mining Corporation, the Chief Minister did not include any financial provision for it. Any expenditure of the government has to be set against a budgetary provision, and a new corporation that has enormous financial implications, as it entails staff, office and other expenses, would require quite a substantial sum to be set aside to meet the outgoings. This has not been done in the Budget. In fact, MLAs had pointed out to the absence of such a budget head and a financial provision in the Budget speech and questioned how the corporation would be formed. Besides, mining being a very capital intensive industry and the sums involved, depending on how the corporation takes forward the sector, are still unknown.
For that matter, there is also no clarity on how the Corporation would function and whether it would be the mining leases or the ore after being mined that would be auctioned through the new entity. At that time of making the announcement of the corporation, and even over two weeks later, this is still not been revealed, though deadlines have been announced. One aspect, however, is certain, the government is finally looking at some tangible solution to the mining muddle that has lasted for longer than it was necessary.
A relevant question now is whether Goa should have taken this step much earlier. State mining corporations are not a new idea to the country, and Goa could do well to look at how other States have taken up mining via corporations. Odisha, Madhya Pradesh, Maharashtra are some of the States that have such corporations. The Odisha Mining Corporation Limited was incorporated in 1956, the Maharashtra State Mining Corporation Ltd was incorporated in 1973. Why has it taken Goa so many years to change the way it was running the mining sector?
That, however, is not to say that a mining corporation would be the solution to all the ills of the mining sector in the State. A government corporation has its merits as they can have greater control on the local market forces but, while it theoretically enjoys all autonomy and flexibility in its management, it is a proven fact that government corporations are not devoid of political interference, which is the biggest drawback of such corporations. The efficiency is also compromised by the fact that the appointees to the board of directors are politically motivated and serving government officers whose interests may be elsewhere and not on the growth, development, financial stability of the corporation they are directing. The State Mining Corporation that Goa is planning would have to rise above these issues if it aims to redeem the mining sector in Goa. When mining operations eventually resume in the State, perhaps after the 2021 monsoon, they should resume on a clean slate.
Alexandre Moniz Barbosa is Editor, Herald. He tweets at @monizbarbosa
