Thursday, January 21, 2010

The nexus between politicians and the mining mafia is wreaking havoc in many Indian states

The recent developments in Karnataka involving the Reddy brothers of Bellary substantiate that allegation. A decade ago, G Janardhan Reddy and G Karunakara Reddy, ministers in the present BS Yeddyurappa government, were small-scale financiers in Bellary. After they forayed into the mining industry, their stocks rose rapidly. Today, it is claimed that they control almost the entire government in Karnataka. It is also claimed that the Reddy brothers and their close friend, Karnataka health minister Sriramulu, fly from Bellary to Bangalore in their own helicopter almost everyday.

The connection between the Reddy brothers and former Andhra chief minister YS Rajashekara Reddy’s son Jagan Reddy is a well-known fact in political circles. The Bellary brothers belong to the BJP and Jagan to the Congress. But in the mining business, they are partners.

With their political clout and money power they have all but obliterated state boundaries with their mining activities. But after Rajashekara Reddy’s demise, the political scenario has changed. The Andhra government is gunning for the Reddy brothers’ Obulapuram Mining Company.

Already behind bars is Madhu Koda, former Jharkhand chief minister. A mine worker, he rose quickly up the political ladder to wrest the post of chief minister. Along the way, he used his position as minister for mines to line his pockets. He is now under the scanner of the Enforcement Directorate. The irony is that in the name of development, the mining industry is growing helter-skelter in Chhattisgarh, Jharkhand and Orissa. On the human development index, however, these states are proven laggards. “In terms of financial growth mining has turned into a major industry in India. But, the growth occurs only in the upper strata of the society. Mine owners, companies and politicians are reaping the harvest. In most cases, uncontrolled mining leads to an unequal society,” says Bhanumathi.

According to experts, almost 50-60 per cent of mining activities in India are illegal. For example, Forest (Conservation) Act of India 1980 is frequently circumvented, thanks to the nexus between mining and politics. Since the enactment of the Act three decades ago, the Union government has granted clearance to mining projects on more than 100,000 hectares of forest land. Though these clearances were strictly conditional, both state-owned and private mining companies have flouted all norms to maximise their profits.

For example, except for a few cases, these mining companies did not carry out compensatory forestation activities. In places that they did so, it was only an eyewash. According to the Union forest ministry, Andhra Pradesh, Orissa, Chhattisgarh, Karnataka and Madhya Pradesh are top five affected states. In Andhra Pradesh, more 15,700 hectares of forest land has been released for mining activities. The story is virtually the same in the other aforementioned states.

“We need stringent laws to put an end to this. Otherwise both the environment, both natural and political, will be marred. I hope the proposed new Mines and Mineral Development and Regulation (MMDR) Act will curb illegal, unscientific mining activities,” says former environment secretary of Karnataka, AN Yellappa Reddy. The final draft of the MMDR Act has been sent to the Union Cabinet for approval.

The Union ministry of mines is hoping that the new Act will usher in an era of sustainable and community-friendly mining. The question is: will the political mafia that controls the spoils of the industry allow that to happen?

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Source :
IIPM Editorial, 2009

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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