GS Paper - 3 Economy (Infrastructure)

Lok Sabha on 19 March 2021 passed a bill to amend the Mines and Mineral (Development and Regulation) Act, with Union minister Pralhad Joshi saying the changes will help create employment opportunities and allow the private sector with enhanced technology in mining activities. The reform in the mining sector would generate 55 lakh direct and indirect employment. To enhance mining activity, it will allow the private sector with enhanced technology in mineral exploration.


  1. India produces 95 minerals and has the same potential like South Africa and Australia but still imports minerals like gold and coal.
  2. The mining sector currently contributes 1.75 per cent to the country's GDP and through the reforms proposed in the bill the contribution will rise to 2.5 per cent and strengthen the economy.
  3. The bill seeks to amend the Mines and Mineral (Development and Regulation) Act, 1957, and would bring in mega reforms in the sector with resolution in legacy issues, thereby making a large number of mines available for auctions.
  4. It will help strengthen the auction-only regime and boost transparency in the system.
  5. The reforms as part of the bill include removing the distinction between captive and non-captive mines and introduction of an index-based mechanism by developing a National Mineral Index (NMI) for various statutory payments, among others.
  6. In order to boost exploration, there will be a review of the functioning of the National Mineral Exploration Trust (NMET). NMET will be made an autonomous body.
  7. Private entities will also be engaged in exploration works now. Simplification of exploration regime will also be done to facilitate seamless transition from exploration to production.
  8. The major objective of the reforms is to generate huge employment opportunities, reduce imports and increase production by bringing large mineral blocks into auction.