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Cabinet approves ordinance for mines auction

The ordinance - the seventh cleared by the new government - is part of the Narendra Modi administration's strategy to fast-track reforms.

Prime Minister Narendra Modi (Photo: Reuters) Prime Minister Narendra Modi (Photo: Reuters)

The Cabinet, headed by Prime Minister Narendra Modi, on Monday approved an ordinance to ram through economic reforms to rev up the mining sector, covering iron ore and other non-coal minerals such as bauxite.

The ordinance - the seventh cleared by the new government - is part of the Modi administration's strategy to fast-track reforms and prevent a hostile Opposition from stalling the decision-making process.

It will pave the way for the allocation of iron ore and other non-coal mines through competitive bidding. It will also enable the creation of District Mineral Funds for the welfare of people affected by a given project.

The need to take the ordinance route was felt as the government was finding it difficult to allocate mines, because the mines ministry could not table a Bill in the Winter Session of Parliament to amend the Mines and Minerals (Development and Regulation) Act, 1957.

Industry body Federation of Indian Mineral Industries, however, has been opposing the auction route, saying it would sound the "death knell" for the industry and may lead to cartelisation and waste.

The mining sector has been reeling under several issues like the ban for the past few years. The previous UPA government had also brought in a Bill in 2011 to amend the Act. But the Bill lapsed with the dissolution of the previous Lok Sabha.

The Opposition, including the Congress and Left parties, have the advantage of numbers in the Rajya Sabha and are out to scuttle the reform drive.

They have criticised the ordinance route as undemocratic, but the government has maintained that it is playing by the rules.

The government has indicated that it is determined to press ahead with reforms and would go for a joint session of Parliament if the Opposition did not relent.

Finance Minister Arun Jaitley has said the Constitution provided a mechanism to deal with the situation as "stalemate and obstructionism cannot go on in perpetuity".

Jaitley had said the country can no longer wait even if one of the Houses waits indefinitely to take up its own agenda.

While the ordinance to go ahead with the e-auction of 204 coal mines cancelled by the Supreme Court had to be promulgated again to meet the March 31, 2015 deadline set by the apex court, the amendment to the land acquisition Act has been pushed through as big industrial projects had been stalled.

The government is likely to push for a joint session sometime in June to push through the bunch of Bills if the Opposition does not allow a discussion and blocks the attempt in the Rajya Sabha during the Budget session that begins in late February and continues till early May.

Since the NDA has an overwhelming majority in the Lok Sabha-which has 543 members against the Rajya Sabha's current standing of 243-the joint session will help it cobble together a majority for clearing the Bills.

THE AMENDMENTS THAT COULD NOT WAIT FOR PARLIAMENT

THE LAND ORDINANCE

WHY: To amend the land acquisition Act in order to make acquisition of land for development activities easier. The Act, introduced by UPA, had made the process difficult, a fact even Congress CMs had complained about.

WHEN: December 29

WHAT IT BRINGS: Quicker acquisition through relaxed rules for projects pertaining to five categories (national security, defence, rural infrastructure, affordable housing and industrial corridors); higher compensation accorded by the Act retained. Condition that 80% of land owners consent to a given deal won't apply to these projects, which will also be exempt from the Act-mandated social impact study involving public hearings.

THE NEW PRINCIPAL SECRETARY

WHY: To clear hurdles posed by the Trai Act in the appointment of former Trai chairman Nripendra Misra as Principal Secretary

WHEN: May 28, 2014, soon after the NDA government took over

WHAT IT BRINGS: Lifts restrictions the Act imposed on Trai chairperson and members in taking up jobs in the central or state governments after retirement.

E-RICKSHAWS

WHY: The Motor Vehicles Amendment Bill could not be passed in the Winter Session

WHEN: On December 24, a day after Winter Session ended

WHAT IT BRINGS: Allows e-rickshaws and ecarts to ply on Delhi's roads legally.

E-AUCTION OF COAL BLOCKS

WHY: The Coal Mines (Special Provisions) Bill, moved to replace an earlier ordinance, was passed by the Lok Sabha in the Winter Session but could not be taken up in the Rajya Sabha due to the conversion row.

WHEN: December 24, a day after the session ended

WHAT IT BRINGS: E-auction of 204 coal blocks for captive use by private companies and direct allotment of mines to state and central PSUs. It follows an SC directive setting March 31, 2015, as the deadline for barred licensees to stop mining blocks whose allocation was declared illegal.

QUICKER ARBITRATION

WHY: Government wanted amendments to the Arbitration and Conciliation Act, 1996, in place at the earliest

WHEN: On December 24

WHAT IT BRINGS: Makes it mandatory for a judge presiding over commercial disputes to settle cases within nine months; intended to be a message to international investors that settling commercial disputes in India will no longer be a time-consuming affair.

HIGHER FDI IN INSURANCE

WHY: The Insurance Laws Amendment Bill, 2008, could not be taken up for discussion in the RS because of Opposition uproar over conversions.

WHEN: December 24, 2014

WHAT IT BRINGS: Hikes Foreign Direct Investment cap in the insurance sector from 26 to 49 per cent, which has the potential to attract up to $7-8 billion (about Rs 50,000 crore) and thus give the segment a major boost.