A whopping 12.8 lakh direct and indirect jobs were lost in the mining sector across Karnataka and Goa due to failure of regulatory mechanism, lack of oversight, judicial intervention and closure of mines, an industry official said on Wednesday.
“Though the mining sector is the third largest employment generator after agriculture and construction, closure of mines in Karnataka and Goa has resulted in the loss of 12,80,000 direct and indirect jobs since 2011-12 due to ineffective regulatory mechanism, lack of monitoring and oversight at the ground level, and the Supreme Court’s interventions,” Federation of Indian Minerals Industries (Fimi) President Sunil Duggal told IANS here.
For every one job the sector creates, 10 indirect jobs are generated with a force multiplier through linkages and supply chains from mining the rich minerals to their use in the end products.
“Closure of 166 iron ore mines in Karnataka’s Bellary, Chitradurga and Tumkur districts since 2011 led to 80,000 direct lay-offs, affecting 8 lakh people indirectly. Similarly, suspension of all mining activities across Goa since 2012 for similar reasons resulted in the loss of 1 lakh direct and 3 lakh indirect jobs,” lamented Duggal.
The decade-long multi-crore scams in Karnataka’s ‘Republic of Bellary’ from 2001-2011 forced the apex court to ban mining in the southern state, favouring auctioning of the mines rather than leasing and renewing the licences of the miners.
“The top court on July 29, 2011 and August 26, 2011 banned all activities in Karnataka’s three mineral-rich districts due to encroachment and dumping beyond the lease areas, in which 166 firms were mining,” recalled Duggal.
Similarly, the apex court suspended all mining operations in Goa on October 5, 2012, as renewals were pending over the years and concerns were growing over the increasing environmental pollution in the absence of protective measures.
“Though the Goa government in 2014 renewed leases with checks and balances to mine iron ore up to 20 million tonne per annum, the Supreme Court on February 7, 2018 cancelled the renewal orders of 88 mines, leading to their closure on March 16, 2018,” said Duggal.
As in other core sectors, one mining job provides work for its associated functionaries, including truck owners, drivers, cleaners, repair shops, petrol-diesel retail outlets, hotels, groceries and banks.
“The closure of iron ore mining in Goa has adversely impacted the coastal state’s economy, with a revenue loss of Rs 5,830 crore for the state as well as the Centre,” said Duggal, who is also the Chief Executive of New Delhi-based Vedanta Ltd for base metals.
The Karnataka government lost Rs 10,000 crore over the last 7-8 years in the form of licence fee, royalty, taxes and duties. State-run banks suffered an asset deterioration of up to Rs 50,000 crore.
“The closure of mines affected raw material (iron) supply to steel and sponge iron plants in Karnataka, and caused production loss in downstream industries such as automobiles, consumer durables, machine tools and engineering products, jeopardising 2 lakh direct jobs,” Duggal said.
The lack of monitoring and oversight at the ground level by the state governments led to irregularities and poor implementation of mining laws.
“The failure of regulatory mechanism led to judicial intervention by the Supreme Court in Karnataka, Goa and even Odisha, where excessive production of iron and manganese ore beyond the environment clearance and other statutory limits forced the top court to impose 109 per cent penalties on the mining firms on June 2, 2017,” added Duggal.
As many firms were unable to pay the penalty, they had to shut the mines. Their closure led to the loss of direct/indirect jobs running into thousands.