Profit-Sharing Provisions in the New Mines Bill to Boost Inclusive Growth: Ministry


NEW DELHI: Disagreeing with the industry’s contention, the Mines Ministry has said that profit-sharing provisions in the new Mines Bill are aimed at “inclusive growth”.

“The basic objective of compensation and sharing of profits is inclusive growth of the entire mining sector and to eliminate the alienation of the host population residing in the mineral bearing areas,” the Mines Ministry has said in note sent to a Parliamentary panel.

The proposed new law for the sector – Mines and Mineral (Development) and Regulation (MMDR) Bill- is with the Parliamentary Standing Committee on Coal and Steel for an in-depth scrutiny.

The Bill provides for sharing of 26% of profit by coal miners and an amount equivalent to royalty by others with project-affected people.

Industry body CII had said that “giving 26% of profits for coal or 100% of royalty for other minerals is not feasible. It will discourage investment and drive down efficiency”.

Opposing the provisions, CII had argued that corporate social responsibility (CSR) work is done by companies on their own and “this additional contribution will be extra burden” and also questioned the District Mineral Development Fund.

The Bill proposes to set up a district development fund, where the money accumulated from the 26% profit sharing by coal miners and an amount equivalent to 100% of royalty for others, will be deposited and spent on local population and area development.

“A separate set of guidelines for strengthening of administration of district mineral foundation will be prescribed,” the Ministry has said.

The Bill, which was introduced in the Lok Sabha on December 12, was referred to the Committee in January for an in-depth scrutiny and recommendations by March-end.

However, sources said, the parliamentary panel, headed by Trinamool Congress MP Kalyan Banerjee, had sought an extension to complete its detailed analysis, dashing hopes of the Mines Ministry to get the Bill passed during the second leg of the Budget session.

The Ministry was keen to get the approval as the Bill not only has the profit sharing formula but also has provisions to check illegal mining.

“The panel is examining the Bill…We hope to get it cleared during the Monsoon session,” a senior Mines Ministry official told PTI.

Once the law is enacted, it is expected to overhaul the sector, bringing in more transparency and boosting foreign direct investment in it.

Earlier, the Ministry of Corporate Affairs (MCA) too had suggested “fine-tuning” of the Bill to parliamentary committee. It had questioned a clause in the Bill that provides for at least one non-transferable share of the mining company to each affected family.

The MCA has said that under the Companies Act, shares of ‘Public Ltd’, ‘Private Ltd’ and ‘listed companies are transferable.

On suggested allotment of shares to affected people, the Ministry had said to the Committee that it was to ensure that mining benefits equally accrue to the local population as a stakeholder.

“The concept of allotting the share to the project affected person is to inculcate a feeling of belongingness among them with the mining company…”

The Cabinet had approved the long-pending controversial draft bill on September 30. It will replace the 54-year-old legislation governing the sector, as it was felt that the existing laws have not provided a fair deal to those affected by the mining projects and the leases were not given in transparent manner.


Please follow and like us:



Previous articleMake CSR Mandatory, Says Philanthropist Sitaram Jindal
Next articleCSR initiatives of Maruti Suzuki
India CSR Network
India CSR Network is India's biggest and most trusted news portal in the domain of CSR & Sustainability. India CSR welcomes stories, statements, updates, reports on issues that interest you. Feedback, comments will make it more purposeful and resourceful. It is designed and maintained by India CSR Group. Contents are non-fiction. Though all efforts have been made to verify the accuracy, the same should not be construed as a statement of law or used for any legal purposes. In case of any ambiguity or doubts, readers are advised to verify with the source(s). Statement, articles, views and contributions can be sent to