Despite India being one of the countries of the Gondwanaland, its mining industry contributes much less to its Gross Domestic Product(GDP) in percentage. Discuss. UPSC GS Paper 1 2021, 10 Marks

Q5. गोंडवानालैंड के देशों में से एक होने के बावजूद भारत के खनन उद्योग अपने सकल घरेलू उत्पाद (जी.डी.पी.) में बहुत कम प्रतिशत का योगदान देते हैं । विवेचना कीजिए ।(150 शब्दों में उत्तर दीजिए)

Q5. Despite India being one of the countries of the Gondwanaland, its mining industry contributes much less to its Gross Domestic Product(GDP) in percentage. Discuss.(150 words) 10 Marks

The mining sector’s contribution to the country`s GDP is 2.3-2.5 % at present. Mineral production in India grew at a compound annual growth rate (CAGR) of 5.72% between 2013-14 and 2017-18 and India  is the 3rd largest steel producer, with a production of 101.4 million tonnes of crude steel in 2017.

Issues with mining industry:

The mining sector is encountering issues such as depleted output, squeezed margins, high taxation, lack of green clearances, and poor investment in fresh exploration. The sector is also facing with other issues such as delays in operationalizing mines.

  • Loss of Public Revenue: Driven by lobbying, political donations, and corruption, minerals are frequently sold at prices significantly lower than the actual worth price. Illegal mining has a similar effect while additionally causing loss of public revenues. According to the International Monetary Fund, due to unsustainable mining, many governments of resource-rich nations face declining public sector net worth.
  • Large Number of Small Mines: In India, many small mines operate in most states. These present difficult challenges for sustainable development as their financial, technical, and managerial limitations restrict their ability to take adequate corrective measures.
  • Growing Inequality & Loss of Natural Wealth: Naturally, the extractors are keen to extract as quickly as possible and move on which deepens inequalities, as a few extractors acquire wealth without proper redistribution to the people. It also results in the loss of natural wealth. For example, it is estimated from the annual reports of Vedanta that over eight years (2004-2012), the State of Goa lost more than 95% of the value of its minerals.

It is necessary to widen the exploration basket through increased reconnaissance and prospecting operations and requires an infusion of funds to achieve this. Thriving competitiveness and growth in the Indian mining sector is an imperative for the survival and success of not only this industry but the economy as a whole.

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