India’s new Prime Minister Narendra Modi, always seen as “pro-business,” had promised to make investment-friendly decisions as soon as he was sworn into office.
It’s been about a month since Modi became India’s Prime Minister. As he pledged to, his government has now decided to start the process of setting up a single-window system to fast-track clearances for various projects to pump up investments in the steel and mining sectors.
The government on Tuesday began the process of setting up a single-window mechanism to fast-track clearances for projects. It also decided to create special mining zones to ensure raw material security for existing and upcoming steel plants in India.
The decision was made after a meeting of the Steel and Mines, Coal and Environment ministers earlier this week. According to a report in The Indian Express, all three were believed India urgently needs such a system.
They are correct. At last count, there were as many as 63,395 mineral mining concession applications pending with various state governments. These include at least 44 coal projects, both open and underground, and six steel projects. The steel projects were also awaiting environmental and forest clearances.
For the last two years, most of the steel and mining projects were caught up in red tape as the previous Congress-led Government dilly-dallied granting permissions, citing one reason or another. Proposed steel projects were put on the backburner for lack of captive iron ore or coal mines. Mining projects were held up for lack of clear paths to steel mills.
In a presentation to the new Steel Minister, officials of this high profile ministry had claimed the steel sector had been discriminated against in the allocation of captive coal mines, despite steel companies completing their end-use plants and investing heavily in mining.
The report said the three ministers also discussed creating special mining zones. These would include certain large mineral bearing areas which could be demarcated as special zones for meeting the demands of the iron-ore starved plants.
Coal, as iron ore, was another raw material that has been causing concern for steel mills as well as the new government. India has been facing a coal shortage for some time, but the Ministry of Environment and Forests has now assured the Ministry of Coal that projects related to coal mining, stuck for want of environment and forest clearances, will be expedited.
The motto of the new Indian Government is to provide an investor-friendly business environment. When he was the Chief Minister of India’s State of Gujarat, Modi shot to prominence for his government’s decisiveness. The example often cited is that of the small car factory set up by the Tatas family. When the company had to abandon its factory plans in the West Bengal state due to farmers’ protests, Modi swiftly invited Tatas to set up its plant in Gujarat. Land and power for the car plant were arranged within three days, and the plant was up and running in two years – a record in India. The business community expects the same speed and alacrity from the India’s federal government now.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.