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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. (Answer in 150 words) [2021]

India’s mining industry, part of ancient Gondwanaland with rich mineral reserves, contributes only 2.2% to 2.5% to GDP. Reasons for low contribution include:

  • Small-scale mining: Providing jobs to 700,000 individuals, small-scale mining contributes 6% to mineral production cost.
  • Illegal mining and scams: Numerous scams cause revenue loss and environmental impact.
  • Freight equalisation policy: In effect from 1952 to 1993, this policy hurt mineral-rich states’ economic prospects.
  • Environmental concerns: Mining activities cause environmental degradation and land rights conflicts.
  • Inefficient bureaucracy: Obtaining licenses and permits is hindered by government inefficiency.
  • Lack of infrastructure: Inadequate roads, power, and water supply hinder operations, especially for small companies.
  • Insufficient financing: Financial constraints limit small mining companies’ industry development.
  • Child labor and poor working conditions: The sector is associated with child labor and hazardous conditions, leading to scrutiny and negative perceptions.
  • Corruption and mismanagement: Scandals like coal allocation scam and illegal mining tarnish the industry’s image and cause revenue losses.
  • Inadequate regulation: Absence of proper regulation leads to illegal mining and environmental degradation.
  • Ban on specific mining techniques: NGT’s 2014 ban on ‘rat-hole’ mining in Meghalaya affected coal production.

To enhance the mining sector’s GDP contribution, India needs policy reforms, improved regulation, and sustainable mining practices.

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