Mafia thrives, govt at loss

State’s rich resources are slipping into the mining mafia’s hands, which is having a field day

Rajesh Kumar

Mining of minerals is a big business in Himachal for obvious lure of lucre behind it. But only the high and mighty wins auctions and walks away with pocketful of profits associated with the trade and not the government, which should ideally be earning the maximum from it. 

The government is legitimately the real custodian of the state’s rich resources, but is not given the present lopsided policy on mining, which is depriving it of the trade’s real margins or more aptly the real revenue it could have earned otherwise had the same been realised directly into its own kitty.

As of now, it is slipping into the wrongful pockets of mafiosi – the unchallenged kings of the trade – who are having a heyday under definitive political patronage. Huge profits they make by manipulating the post auction sale of minerals unscrupulously are much bigger in contrast to what the government earns in the form of royalty, which is a modicum of the big money that literally exchanges hands in the black market, where a bigger chunk of minerals is sold out at exorbitant rates. 

An obvious nexus that operates on the ground is devouring state’s rich mineral resources meant fundamentally for the people of the state, who must have them at affordable prices, but sadly it is not happening!

Is political will so feeble in our state that no successive government could ever dare inject a potent antidote into the system to countering the poison of corruption that currently flows in its veins? Has the state leadership been sucked-off of all morality, which may succinctly coax it to rise to the issue and do the needful to arresting this open plunder of state resources?

It is ironical that on the one side the government cries hoarse of perpetual revenue crunch, while on the other it makes no effort at generating more not even from a sector as lucrative as ‘mining’. If managed prudently through political pragmatism, mining can prove a ‘gold mine’ for the state’s empty coffers. It may not only ramp up revenue generation, but also check effectively black economy, running parallel to the mainstream, from flourishing further.

Our present policy on mining

It entails auctioneering of riverbed sites to contractors on lease for quarrying and in lieu, thereof government earns royalty. Post-auction sale of the quarried materials falls within the purview of contractors, in whose names auction bids are accepted. Approximately, 35 lakh tonnes of sand, gravel and boulders which are put up for open auction in the state annually become their property as long as the lease lasts.

Once modalities are over, the real process of minting money begins and most nefarious games are played out well with impunity. The modus operandi involves creating artificial scarcity of minerals by selling the bulk to adjoining states in connivance with unscrupulous state officials, who though seem to draw their bread and butter from the state they are under oath to serve, are rendering their factual services to the plunderers of the state’s rich resources by becoming their de-facto impresarios. Prices thus escalate exorbitantly much to the chagrin of the local people, who end up paying rates which have now almost trebled or quadrupled.

What may plug the lacuna...

It is time the ruling government walks the talk, bids adieu to the followed procedures that favour contractors more and the government less and puts in place a new methodology. It is high time it sets in a new precedent by changing the oft-repeated dictum ‘Government has no business to be in business’ by making elaborate arrangements for conducting post-auction sale of minerals directly under its own supervision by deputing state officials of unimpeachable integrity on the job.

  • First, assess and establish total per cubic foot capacity/volume of the minerals to be quarried from a given site by conducting geological surveys, as has been the current practice. 
  • Second, arrive at total rupee-wise value of the volume, so identified by adding some increment over last year’s auction value. The value so arrived would serve as baseline for the next year’s value addition.
  • Third, add contractor’s profit margin over the value so arrived. Though earlier procedures lent him enough room to operate at will and become the master of resources after having won the auction, present proposition entitles him only a limited leeway, where he would be a mere facilitator for executing post-auction sales of minerals on government’s behalf and nothing more. Auctioneering in real term would be for fixing a probable percentage of profit margin, to be given to him for availing his services and that also through competitive bidding, in which he must participate if he wants to eke out a living for himself. Whosoever bids for the lowest percentage wins the auction.
  •  Fourth, fix sale price of minerals @ per cubic foot and put them on public domain for information of general public for better transparency. The contractor in whose favour the bid has been finally approved would stand stipulated for selling the materials in open market @ ‘per cubic foot’ rate only fixed by the government and not at per ‘Tractor -trolley’ or per ‘Tipper’ rate as had been the practice. He could be further directed to issue bill/invoices in the names of the buyers from duly authenticated bill books to be issued by the industry’s Mining Department.
  • Final figures of total volume sold by him from a given quarrying site, which he must furnish in his returns to become eligible for participating in next year’s auction, could be reconciled with the figures assessed by the geographical survey experts (step no.1). Resource depletion due to over extraction – a big cause of environmental degradation – beyond permissible depth of one metre could be verified by physical inspection of any given site. 
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