Industry body CII on Monday said the mineral sector could be a potential driver of growth under the current times and stressed that reforms announced for the sector, including the proposed National Mineral Index, will help attract investments.
In a letter to NITI Aayog Vice Chairman Rajiv Kumar, CII National Committee on Mining President Sunil Duggal said, "Under these times of economic stress, where the government is under pressure to spur growth, the mineral and resources sector could be a potential driver of high growth capable of contributing 8 per cent of GDP by 2025-taking India on a path towards USD five trillion economy."
Given the present employment crisis in the country, the mining sector could be the key to utilise India's phenomenal demographic dividend, Duggal, who is also Vedanta Ltd Group CEO, said.
A recent study pegged the employment potential of the mining sector at over 48 lakh direct jobs by 2025.
Given this enormous potential, investing in the mining sector could be the panacea for the Indian economy to tide over the economic stress caused by the COVID-19 crisis.
"We welcome and support the various legislative reforms announced for the mining sector, which will revitalise the sector, attract investments and provide a headwind for the growth of the sector," the CII said.
The development of the proposed uniform National Mineral Index (NMI) for all minerals in line with National Coal Index will tackle the ambiguities in the current average sale price regime, resolve irregularities of high ASP of limestone and bauxite (metal), he said.
In line with the National Coal Index, the proposed "NMI can consider production from all sources of production captive, non-captive mines etc and will give the correct valuation of minerals also effectively addressing concerns of royalty on royalty as done in coal sector."
Single stage seamless composite exploration cum mining cum production regime will transform the stagnant exploration sector attracting private investments and best of global technologies, he said.
Commercial mining regime with no demarcation of captive and non-captive will promote competitiveness of the mineral block auctions, further enhancing the transparency of the system.
Joint auction of bauxite and coal will improve the efficacy of the aluminium industry, a strategic sector with use in infra, power, aerospace and defence.
"This shall save forex loss of around USD 6 billion on account of aluminium exports. Aluminium as a sector has potential to attract fresh investments of over USD 30 billion to meet the expanding aluminium demand of the country and to be a global trade alternative to China," he said.
Segregation and deferment of stamp duty in tranches will provide the much-needed ease of cash liquidity required by the sector in the early stages of mine development wherein the production from mines is yet to start.
"All the key reforms proposed will enhance ease of doing business quotient and improve the investment environment of the Indian mining sector," Duggal said.