In what could be termed a mid-term assessment of the Narendra Modi government’s economic policies, the global industry leaders gathered in the national capital at the Network 18-CII organised ‘Global Natural Resources Conclave’ on 5 April, and gave a unanimous thumbs-up to the leadership of Prime Minister Modi and his vision for a new India.
Observations made in the panel discussions and individual presentations by some of the key players from global industry representing largely the mining and exploration sector on the Day One of the two-day Conclave could be summed as a SWOT (Strength-Weakness-Opportunity-Threat) analysis of the Centre’s economic agenda.
While on one had the captains of the industry hailed the vision, leadership and policies of Modi, on the other there was no inhibition in pointing out the shortcomings and weaknesses existing in the government machinery.
“I borrowed part of Narendra Modi's phrase for the title of my second book From Red Tape to Red Carpet, which was co-launched in India by PM Modi in 2015. India is now the fastest growing major economy in the world — lifting living standards and bringing many out of the misery of poverty — a very significant accomplishment and one that many countries respect,” said Gina Rinehart, Chairman, Hancock Prospecting.
SWOT Analysis: Strength (S)
The panelists opined that the strength vis-a-vis opportunities could help the Modi government in achieving its growth target and India can emerge as a leader in the field mineral and energy resources in the world. India has immense potential in mining and exploration:
• Stable government at the Centre with focus on technology
• Leadership and vision of Prime Minister Narendra Modi
• Various reforms undertaken by the government in the form of Mines and Minerals (Development & Regulation) Act 2015; National Mineral Exploration Policy Act 2016; FDI policy; Transparency
• 65 percent of the total population is below 35 years of age
• Large manpower and hardworking entrepreneurs
“India was the country that gave the world the Kohinoor. The Taj Mahal and the Victoria Memorial were built with resources present here...Prime Minister Narendra Modi is taking India from a $2 trillion economy to a $20 trillion economy, and the current government's focus on technology, digitisation and communication is taking India from red tape to red carpet. Time has come to look below the ground and explore ‘swadeshi’ natural resources in a sustainable manner,” said Anil Agarwal, Group Chairman, Vedanta Resources Plc.
• Simplification of processes, policies and frameworks
• Taxation issues
• To do away with red tapism
• Bureaucracy needs to be quicker
• Improve ease of doing business in mining industry in India
• Complexity and bureaucratic functioning many times higher in India than in Australia
• In India on an average it takes two-three years to get a mining license, whereas countries ahead of India, it takes two to three months.
• Infrastructure to be improved and logistics needs to be upgraded to increase productivity
• In 2025, there will be a huge gap between demand for coking coal, iron ore and bauxite on one side and on the other side the existing production, mines and new investments
• Certain NGOs and groups with vested interests, including a section of media don’t want India to prosper and cause hurdles
“India is also lagging in several dimensions if you look at the policies, frame work, bureaucracy and red tape...lots of opportunities can be tapped if key areas can be focussed upon... if the public sector and the private industry jointly set explorations, we believe that the mining industry (India’s) can give additional $20 billion contribution in next five years and can create six million much needed jobs in India,” said McKinsey’s senior executive.
• India has geological potential and locational advantage in Asia
• As per IMF assessment, India’s growth in 2016 was 6.6 percent and projected to grow at 7.2 percent and 7.7 percent in 2017 and 2018
• India is the fastest growing economy among major nations in the world
• Strong encouragement from the government on investment in oil and gas sector in India
• Government’s new policy on hydrocarbon
• Large scale domestic consumption of the production
• India has world-class bauxite, copper deposits and the world's largest producer of sheet mica, and third largest producer of iron ore. Foreign investors are willing to go for exploration
“Today’s GNR Conclave is an excellent opportunity to share ideas and pursue investment in energy in India in future. It’s the right time to be in a country (India) which is a bright spot among major economies of the world,” said Melody Meyer, President, Melody Meyer Energy LLC.
• India has only done 10 percent of exploration compared to 80 percent in the rest of the world
• Biggest problem is the corruption in mining
• India’s mining contribution to GDP is very low. It was 1 percent in 2012 vis-a-vis Australia’s 4.3 percent and China’s 3.3 percent
• India’s spending on exploration projects is at 0.3 percent as compared to Canada’s 19 percent and Australia’s 12 percent
• Despite having rich mineral resources and in abundance, India might continue to rank much behind China, Australia, Canada and others
“The need is to make mining sector transparent and rational or else it won’t be possible to grow. The latest mining bill has made the auction process transparent, unlike in the past when licenses were given on the discretion of political leadership,” remarked Sajjan Jindal, Chairman, JSW Group.
Updated Date: Apr 06, 2017 14:16 PM