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150 Words10 Marks

Q.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.

UPSC Mains 2021Geography

Introduction

Despite its ancient geological origins as part of the mineral-rich Gondwanaland, India's mining sector contributes a meager 1.75% to its Gross Domestic Product (GDP). This stands in stark contrast to other Gondwana fragments like South Africa (7.5%) and Australia (6.99%).

Body

Reasons for Low Contribution:

  • Geographical and Social Overlap: Major mineral reserves are located in ecologically sensitive forest areas inhabited by tribal communities. Balancing mineral extraction with tribal welfare and environmental conservation presents a democratic challenge.
  • Regulatory and Legal Bottlenecks: The sector faces complex, multi-layered clearance processes (environmental, forest, and land acquisition), rendering projects economically unviable. Legal interventions, such as the Supreme Court's cancellation of coal block allocations, have also disrupted output.
  • High Taxation and Levies: Indian mining is subjected to some of the highest tax burdens globally, including high royalty rates and double taxation.
  • Inadequate Exploration: Highly restrictive licensing regimes have historically discouraged private investment in deep-seated mineral exploration.
  • Public Sector Monopoly: Key sectors like coal have long been dominated by public sector undertakings (e.g., Coal India), leading to underutilization of assets and inefficiencies.
  • Slow Technological Adoption: The transition toward modern, automated, and smart mining technologies has been slow.

Conclusion

The Indian mining sector possesses immense potential to drive industrial growth and reduce import reliance. Streamlining administrative clearances and addressing security challenges (such as Left-Wing Extremism in mineral belts) are essential steps forward.