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State PCS

Mains Practice Questions

  • Q. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (150 words)

    28 Feb, 2022 GS Paper 1 Geography


    • Contribution of the mining sector in India’s GDP (Gross Domestic Product).
    • Reasons behind this less percentage of contribution.
    • Steps taken by the Government and their significance


    Despite being a part of Gondwana land, rich in providing minerals such as coal, iron, mica, aluminum, etc, the contribution of the mining sector to India's GDP has been on a steady decline.

    • Contribution by the mining sector to the GDP is only 1.75%.
    • Whereas other countries like South Africa and Australia contribute 7.5% and 6.99%.



    • Tribal Communities: Several tribal communities and Particularly Vulnerable Tribal Groups (PVTGs) fall into the mining zones. Their residence is also threatened by an increase in mining. Their rehabilitation & compensation is another major issue.
    • Administrative issues: The auction of a mine is a process where the power rests in the hands of state governments. There might exist ambiguity in the case where there are two different political parties in power at the center & state.
    • Lack of investment in exploration and the upgradation of technology. Still obsolete and low efficient technology is used.
    • Unforeseen issues such as Covid-19 pandemic have adversely affected the mining of ferrous, non-ferrous and minor minerals.
    • Environmental Concern: The reforms in the act unshackle the mining sector of India, as much it is beneficial for the development of the country. Mining is harmful from an environmental point of view.
    • Government policy efforts are not yet successful and faced several challenges.

    Steps Taken by the Government

    MMDR Amendment Bill, 2021

    • The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957 which regulates the mining sector in India.
    • Removal of restriction on end-use of minerals:
      • The Act empowers the central government to reserve any mine (other than coal, lignite, and atomic minerals) to be leased through an auction for a particular end-use (such as an iron ore mine for a steel plant). Such mines are known as captive mines.
      • The Bill provides that no mine will be reserved for a particular end-use.
    • Sale of minerals by captive mines:
      • The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs.
    • Auction by the Central Government in certain cases:
      • The Bill empowers the central government to specify a time period for completion of the auction process in consultation with the state government.
      • If the state government is unable to complete the auction process within this period, the auctions may be conducted by the central government.
    • Transfer of statutory clearances:
      • It provides that transferred statutory clearances will be valid throughout the lease period of the new lessee.
        • Currently, the new lessee has to apply for fresh clearances within two years of the transfer from the previous lessee.
    • Allocation of mines with expired leases:
      • The Bill adds that mines whose lease has expired may be allocated to a government company in certain cases.
      • The state government may grant a lease for such a mine to a government company for a period of up to 10 years or until the selection of a new lessee, whichever is earlier.
    • Extension of leases to government companies:
      • The Act provides that the period of mining leases granted to government companies will be prescribed by the central government and may be extended on payment of additional amounts prescribed in the Bill.


    There is a need for an expedition of the clearance process for the judicious utilisation of mineral resources. Stringent implementation of mining-related rules is needed especially regarding the ban on Rat-Hole and unscientific mining to prevent mine-related accidents.

    Focussing on high-end technology for underground mining used by miners across the globe is the solution.

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