Displaced persons must get shares in mining cos, says mines ministry
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Steamrolling the concerns raised by mining firms, the mines ministry has told a Parliamentary committee that people displaced from their homes in mining zones have to be allotted shares of the mineral exploration companies.
The ministry's main argument is that the move would promote inclusive growth and make the locals genuine stakeholders in companies operating in their land. The proposal, if it passes muster, could enable displaced persons to have a representation in the boardrooms of mining company as equity shareholders.
Miners have consistently argued against sharing a part of their profits with the Project Affected Persons (PAP) in their respective areas, as mandated in the Mines & Minerals (Development & Regulation) Bill 2011, saying it will discourage investment and drive down efficiency. But the mines ministry has informed the Parliamentary committee on coal and steel, in a meeting on June 30, that the compensation and profit-sharing mechanism will ensure "inclusiveness and prevent alienation of the host population in the mining zones".
Countering the industry's contention that the proposal to allot shares to PAP will change the holding pattern of the firm with time and, thereby, is not a workable idea, the ministry has argued, "The concept of allotting the share to the PAP is to inculcate a feeling of belongingness among them with that mining company as they will be a part of the process by attending the general body meetings of that company."
The MMDR Bill 2011 laid in the Lok Sabha is currently being debated by the Standing Committee. Planning Commission Deputy Chairman Montek Singh Ahluwalia too had raised a red flag on the 26 per cent profit-sharing mechanism.
Ahluwalia said he feared if the proposal was implemented then "there would be no Plan discipline on the use of these resources and the funds would be invested without reference to any development plan for the region."
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