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A rich per capita income state Goa bearing double whammy of tie between the courts and policy makers

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Goa a state of 15 lac population the major two economic activities is tourism and mining. Tourism had its hit due to COVID 19 and will take at least an year to recover. The related service industry had its toll by loss of job and business. The double whammy is unresolved issue of mining in Goa.

By Dr Aruna Sharma

Goa a state have 1.4 billion ton of iron ore with 12546 of trucks out of 20000 trucks registered in Goa linked to mining operations, 223 out of 375 barges do the transport of iron ore and 220 Mining Machineries are registered with department of Mines and Geology. All of these are lying idle causing loss of business and the income source to the residents of Goa and also the state GDP. The above fact is to highlight that the complete stoppage of mining activity has resulted in cascading effect with resultant loss of annual revenue of Rs3500 crores to the state Government per annum that amounts to 22% of the total revenue.

Thus, a vibrant state has been brought to a grinding halt due to apathy of resolution of self inflicted issue of harmonizing the two acts and the Supreme Court verdict that just halts the entire operations

The major Mining in Goa, is iron ore that is of low quality with only of 56-58% Fe (Iron) content and hence no market within India but had its niche in the export market where it is amalgamated with other iron for steel manufacture. Thus a 100% export oriented industry with direct or indirect employment to one in three of the households linked to income from mining or its allied activities. Goa was among the highest per capita income The sudden closure of mines due to order of the Supreme Court when it quashed the renewed lease of 88 mines and imposed the ban on the entire mining operation. Strange enough the issue of mining in Goa is not related to environment where Goa in the past has set good practices regime with ISO 14001 standards to ensure it does not have adverse impact on the pristine environment o Goa. The miners were proud to exhibit the systematic and scientific mining practices and were recognized for the same by even government bodies like IBM and DGMS. The reclamation and rehabilitation were exemplary and were referred in different mining forums both in India and abroad. The low iron content as well as high stripping ratio i.e. more removal of waste rocks per ton makes it more an export product and thus brings in precious foreign exchange to the country. Japan, South Korea and China are the markets. The National Mineral Policy also talks to encourage exports. But here a good opportunity is getting lost with the vacuum being filled by the Australia and other countries.

The issue related to mining is Goa is clear case study of self inflicted problem causing damage to entire economy of the state. Goa has two major acts related to the issue the Goa Daman Diu Abolition and Declaration of Mining Lease Act of 1987 (Abolition Act 1987) and the new MMDR Act of 2015 amended in 2019. These to be read and understood along with the court judgment are the crux of the issue and what it needs is the harmonization of them.

On 23rd May 1987, the High Court had upheld the validity of the Abolition Act and directed that it cannot be applied retrospectively and any impact has to be prospectively (Section 22 (1) (a) of the Abolition Act). Thus, it made it clear that it will be prospective. The mention of 20th Dec 1961 was only to the limited extent of to raise the additional royalties and dead rents and to avoid refunds to the miners collected between 1961 -1987.

This settled issue was challenged in the SLP by the concessionaries that had interim order on 2nd March 1998 that allowed continuation of mining operations where lease renewal applications were already filed and fees and other royalties were paid.

February 2018 verdict of Supreme Court brought mining operations to a complete halt reducing the economy of Goa to very low income state and also per capita earnings.

Thus, what needs to be resolved is agreeing to the date of 23rd May 1987 read along with the MMDR Act 2015 by harmonizing the two acts and the court decisions. Section 8(A)(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). The Mines and Minerals Development Act as amended in 2015/2020 states that all mining leases that were operational before the amendment came into force “shall be deemed to have been granted for a period of fifty years.” Thus extend the existing mining lease by 50 years from 1987 to 2037.

This resolution at the earliest is need of the day to save mining, niche in world market, income of local population and state GDP. The people and citizens need this resolution at the earliest.

03/08/2018-State has passed unanimous resolution

“This House urges the Central Government in its wisdom to take all such necessary steps, including appropriate Legislative measures to ameliorate the social and economic chaos which has befallen the State of Goa and its economy, due to the complete closure of Mining operations in the State. The Legislative measures are needed to harmonise Mining Law specifically enacted for Mining Concessions in Goa with the amendment of 2015 to the Mines and Minerals (Development and Regulation) Act 1957 by the central Government so as to ensure that under the federal spirit, Goa is on an even keel with the rest of the country keeping in mind its uniqueness.”

The latest letter written by the State Government to the Honorable Prime Minister in 2020 once again emphatically has requested to resolve the issue.

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Solution is simple just harmonize two acts,The MMDR (Mines and Minerals Development and Regulation Act 2015 and The Goa Daman & Div Mining Concession Abolition and Declaration as Mining Leases Act 1987.

The author is Practitioner Development Economist and (retd) Secretary Steel GoI

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