Economic Development: April 2023 UPSC Current Affairs | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

World Bank on India’s Growth Forecast

Context

• The World Bank recently released the South Asia Economic Focus: Expanding Opportunities: Toward Inclusive Growth report.

Highlights of the Report

• Forecast for the current fiscal year
  • The World Bank has forecast a 6.3% economic growth rate for India in the current fiscal year (FY) which ends March 31 2024. This is a downgrade of 0.7 percentage points since its October forecast.
• Reasons behind the downgrade
  • The primary reasons for this are high borrowing costs and slower income growth causing weaker consumption, as well as the government tightening fiscal expenditure. 
• Major concerns
  • While India fared better than the rest of the South Asian region, two major concerns were the–
  • Female labour participation rate, which had dropped to below 20%, and
  • Informal sector neither becoming more productive nor shrinking.
• Predictions for South Asia
  • The South Asia region as whole is expected to grow at 5.6% this calendar year.
• Performance of Services Sector
  • The services sector — and then the construction sector — were the fastest going industries in India, according to the World Bank.
  • Investment growth remained strong and business confidence was high in India, the report said.

Suggestions made in the Report

• There is still a huge structural agenda in India to make growth more inclusive to increase participation.
• Private investment from abroad needed to be increased, especially in the services sector.
• The government has done a lot to improve social protection, but that is by itself not enough. Ultimately, it is about increasing more opportunities in the labour market and there’s still a long way to go.

National Mission on Natural Farming 

Why in News?

The Government of India has launched the National Mission on Natural Farming (NMNF) as a separate and independent scheme to promote chemical-free and climate-smart agriculture.

What is the National Mission on Natural Farming?

• About:
  • The National Mission on Natural Farming (NMNF) has been formulated by upscaling the Bhartiya Prakritik Krishi Paddhati (BPKP) to promote natural farming across the country.
• Coverage:
  • NMNF will cover a 7.5 lakh hectare area by developing 15,000 clusters. The farmers willing to implement natural farming on their field will be registered as cluster members, each cluster shall comprise 50 farmers or more with 50-hectare land.
  • Also, each cluster can fall into one village or spread across 2-3 nearby villages under the same gram panchayat.
• Financial Assistance:
  • Under NMNF, farmers will receive a financial assistance of ₹15,000 per hectare per year for three years for the creation of on-farm input production infrastructure.
  • However, the incentives would be provided to farmers only when they commit to natural farming and have actually taken it up.
  • If a farmer defaults or does not continue with natural farming, subsequent instalments shall not be disbursed.
• Web Portal for Implementation Progress:
  • A Web portal has also been launched for the promotion of natural farming with information on the implementation framework, resources, implementation progress, farmer’s registration, blog, and so on.
• Master Trainers:
  • The agriculture ministry is undertaking large-scale training of master trainers, ‘champion’ farmers and practising farmers in the techniques of natural farming through the National Institute of Agricultural Extension Management (MANAGE) and National Centre of Organic and Natural Farming (NCONF).
• Establishment of BRCs:
  • The Centre intends to set up 15,000 Bhartiya Prakritik Kheti Bio-inputs Resources Centres (BRCs) to provide easy access to bio-resources wherein cow dung and urine, neem and bioculture play an important role.
  • These bio-input resource centres would be set up alongside the proposed 15,000 model clusters of natural farming.

What is Natural Farming?

• About:
  • Natural farming is a chemical-free farming method based on locally available resources.
  • It promotes traditional indigenous practices, which give freedom to farmers from externally purchased inputs.
  • The major stress of natural farming is on-farm biomass recycling with biomass mulching, use of on-farm desi cow dung-urine formulation, managing pests through diversity, on-farm botanical concoctions, and exclusion of all synthetic chemical inputs directly or indirectly.
• Significance:
  • Ensures Better Health: As Natural Farming does not use any synthetic chemicals; health risks and hazards are eliminated.
  • Food has higher nutrition density and therefore offers better health benefits.
  • Increased Farmers’ Income: Natural Farming aims to make farming viable and aspirational by increasing net incomes of farmers on account of cost reduction, reduced risks, similar yields, incomes from intercropping.
  • Rejuvenates Soil Health: The most immediate impact of Natural Farming is on the biology of soil—on microbes and other living organisms such as earthworms.
  • It improves soil health and in turn increases productivity.
• Issues:
  • Lack of Irrigation Facility: Only 52% of India's Gross Cropped Area (GCA) is irrigated at the national level. Even though India has made significant strides since independence, many farms still rely on the monsoon for irrigation, limiting their ability to plant more crops.
  • Lack of Readily Availability of Natural Inputs: Farmers often cite the lack of readily available natural inputs as a barrier to converting to chemical-free agriculture. Not every farmer has the time, patience, or labour to develop their own natural inputs.
  • Lack of Crop Diversification: In spite of the rapid commercialization of agriculture in India, most farmers assume cereals will always be their main crop (due to skewed Minimum Support Prices in favour of cereals) and ignore crop diversification.

Other Initiatives to Promote Natural Farming

• Paramparagat Krishi Vikas Yojana (PKVY):
  • The NMNF is an upscaling of the Bhartiya Prakritik Krishi Paddati (BPKP) which is a sub-scheme under Paramparagat Krishi Vikas Yojana (PKVY).
  • PKVY provides financial assistance to farmers who want to adopt organic farming practices and encourages them to use eco-friendly techniques for pest management and soil fertility management.
• Climate Smart Agriculture:
  • Climate smart agriculture is an integrated approach to managing landscapes-cropland, livestock, forests, and fisheries-that address the interlinked challenges of food security and climate change.
  • It aims to tackle three main objectives: sustainably increasing agricultural productivity and incomes, adapting and building resilience to climate change, and reducing greenhouse gas emissions wherever possible.

Biotech-KISAN Scheme

Why in News?

The Biotech-Krishi Innovation Science Application Network (KISAN) scheme has been successful in providing benefits to over 1 lakh 60 thousand farmers in the last one year.

What is Biotech-KISAN Scheme?

• About: 
  • Biotech-KISAN scheme is a farmer-centric scheme for farmers, launched in 2017, developed by and with farmers under the Department of Biotechnology, Ministry of Science and Technology.
  • It is a pan-India program, following a hub-and-spoke model and stimulates entrepreneurship and innovation in farmers and empowers women farmers.
  • It has a unique feature to identify and promote local farm leadership in both genders.
  • Such leadership helps to develop science-based farming besides facilitating the transfer of knowledge.
  • Biotech-KISAN Hubs have been established covering all 15 agroclimatic zones and Aspirational Districts in the country.
• Aim 
  • The programme links available science and technology to the farm by first understanding the problem of the local farmer and then providing scientific solutions to those problems.
  • The Biotech-KISAN hubs are expected to fulfill the technology required to generate agriculture and bio-resource related jobs and better livelihood ensuring biotechnological benefits to small and marginal farmers.
• Counseling and Demonstrations:
  • Under the scheme farmers are provided counseling and demonstrations on improved seed, planting stock of vegetable, interventions for use of plant growth-promoting rhizobacteria (PGPR’s)/bio-fertilizers, irrigation & protected cultivation technologies.
  • Improved livestock (goat, pig), poultry and fishery as well as health management of livestock/poultry are also covered under it.

Open-Source Seed Movement

Context

• The Open-Source Seed Movement is spreading to ensure that plant varieties remain free from patents.

Background

• In many countries today the fight for seed freedom is at a critical point.
• Corporate seed giants make it illegal to save seed by pushing deliberately ruthless patent infringement laws and other broadband regulatory seed laws that favor industry and suppress the rights of farmers to generate and maintain local and open-pollinated seed varieties.
• In many places around the world it is already illegal for farmers to save and share seed.
• The European Union, Canada, and parts of Africa, South America, and India have legislation in place making activities of seed saving and even seed swapping increasingly illegal.

How is Intellectual Property protected in agriculture?

• In effect, there are now two forms of IPR protection in agriculture: plant-breeders’ rights and patents.
• Together, they restrict farmers’ rights and the freedom to develop new varieties using germplasm from IP-protected varieties. They have thus further consolidated the seed sector and increased the number of plant varieties covered by IPRs.
• The high prices of genetically modified seeds and IP claims triggered many problems, including the State’s intervention on Bt cotton seeds in India.
• As public sector breeding declined and the private sector began to dominate the seed sector, the need for alternatives became keenly felt.
• This is when the success of open-source software inspired a solution. In 1999, a Canadian plant-breeder named T.E. Michaels suggested an approach to seeds based on the principles of open-source software.

Open -Source Seed

• An open-source crop variety is one that is not restricted by plant patents or other proprietary limitations used by F1 hybrids and crops of CMS and GMO technologies.
• The open-source seed movement affirms that plant genetics and their physical traits cannot, and should not, be owned by individuals or corporations.
• In other words, plants should never be privatized or restricted because they are a collective resource.
• The genetics of open-source seeds are protected and pledged to forever remain in the public domain.
• The Open Source Seed Initiative simply asks for a pledge, that an individual won’t “restrict others’ use of these seeds or their derivatives by patents or other means, and to include this pledge with any transfer of these seeds or their derivatives”.

State of such Initiatives in India

• Open Worldwide, the number of seed firms using open source models and the crop varieties and seeds made available there under is small but growing. India is yet to test and adopt it widely.
• Under the Plant Variety Protection and Farmers’ Rights Act (PPVFRA) 2001, farmers can register varieties as ‘farmer varieties’ if they meet certain conditions, and have the right to reuse, replant, and exchange seeds. However, they can’t breed and trade in varieties protected under the Act for commercial purposes.
• Using the open source approach here will enable farmers to gain more rights over germplasm and seeds and facilitate innovation. So there is a need to test this approach with farmers and the three FPOs can take the lead.

Potential of the Model

• One potential application of the open-source approach is to use it in farmer-led seed conservation and distribution systems. There are many traditional-variety conservation and sharing initiatives in India ,including those involving farmers.
• Many of them focus on traditional varieties that are unique to specific regions or sites and/or have specific features. To more widely adopt these varieties, the government and other stakeholders can consider an open source model.
• The model can also be used to promote farmer-led participatory plant-breeding exercises.
• Traditional varieties often lack uniformity and aren’t of excellent quality.
• Open-source principles can help overcome these two challenges by facilitating testing, improvisation, and adoption – all of which will ultimately be beneficial to India’s food security and climate resilience.

Closing Remarks

• Seeds and the food and fibers that they produce are a foundational component of human culture and pivotal to the health and economic well-being of many of the world’s inhabitants.
• Open source seed approach has become essential in an era of competition between free and collaborative innovation and an increasingly pervasive global IP (intellectual property) regime.
• In turn, open-source seeds are key to reestablishing equity and fairness to so-called developing countries as they are the historical source of most of the world’s common food sources.
• Indigenous and local farmers selectively bred the seeds for thousands of years before they were suddenly defined as sovereign property – an outcome that is both unfair and detrimental to the protection and development of that demographic. 

Small Savings Instruments

Why in News?

Despite successive hikes in interest rates on several small savings instruments (SSIs) in the last three quarters, the returns on some of such schemes are still significantly lower than what they should have fetched (as per calculations released by the Reserve Bank of India (RBI)).

What are Small Savings Instruments?

• About:
  • Small savings instruments help individuals achieve their financial goals over a particular period.
  • They are the major source of household savings in India.
  • Collections from all small savings instruments are credited to the National Small Savings Fund (NSSF).
• Classification:
  • The small savings instrument basket comprises 12 instruments which can be classified into three categories:
  • Postal Deposits: (comprising savings account, recurring deposits, time deposits of varying maturities and monthly income scheme).
  • Savings Certificates: National Small Savings Certificate (NSC) and Kisan Vikas Patra (KVP).
  • Social Security Schemes: Sukanya Samriddhi Scheme, Public Provident Fund (PPF) and Senior Citizens 'Savings Scheme (SCSS).
• Rates of Small Saving Instruments:
  • The rates for small saving instruments are announced quarterly.
  • Theoretically, it is based on yields of G-Secs of corresponding maturity but political factors also influence the rate change.
  • The Shyamala Gopinath panel (2010) constituted on the Small Saving (SS) Scheme had suggested a market-linked interest rate system for SS Schemes.
• Formula for Small Savings Rates:
  • It is used to calculate the interest rates for various SSIs in India and is based on the average quarterly yields on G-Secs in the first 3 of the preceding 4 months.
  • The formula is used to decide how much interest to pay to savers who invest in SS schemes.

What are the Few Important Small Savings Schemes?

• Sukanya Samriddhi Account Scheme:
  • Aims to promote the welfare of girl children in India.
  • Parents or legal guardians can open deposits for up to two daughters aged below 10, and in the case of twin girls or three girl children, the scheme allows three accounts to be opened.
  • Minimum initial deposit - Rs 250; Maximum annual ceiling - Rs 150,000.
  • Deposits can be made for a maximum of 15 years; account matures on completion of 21 years from the date of opening or on the marriage of the account holder, whichever is earlier.
• Senior Citizens’ Savings Scheme:
  • To provide senior citizens in the country a regular source of income after they turn 60 years old.
• Eligibility
  • Indian citizens above 60 years of age
  • Retirees in the age of 55-60 years who have opted for a Voluntary Retirement Scheme (VRS) or Superannuation
  • Retired defense personnel between 50-60 years of age.
• Maturity period of five years, which can be extended for another three years.
• Minimum deposit - Rs. 1,000; Maximum deposit limit increased to Rs. 30 lakhs in the Union Budget 2023-24.
• Premature withdrawal is allowed after one year of opening the account.
• Deposits in SCSS also qualify for deduction under Section 80-C of the Income Tax Act.
• Monthly Income Scheme:
  • Allows monthly investments by Indian residents above the age of 10 years. 1-3 individuals can hold the account jointly.
  • Has a 5-year lock-in period with premature withdrawal allowed after one year with a penalty.
  • Maximum deposit limit enhanced in Union Budget 23-24 to Rs 9 lakh (for single account) and Rs 15 lakh (for joint account).
  • Any income from the scheme is not subject to TDS or tax deductions.
  • NRIs not eligible to invest in this scheme.
  • Account is transferable from one post office to another.
• Public Provident Fund (PPF):
  • Encourages individuals to save for their retirement.
  • Has a tenure of 15 years, extendable to an additional 5 years after maturity.
  • Minimum annual investment required to keep a PPF account active - Rs. 500; Maximum investment limit - Rs. 1.5 lakh per FY.
• Kisan Vikas Patra (KVP):
  • Governed by the Government Savings Certificates Act 1959 (an SSI offered by India Post).
  • Originally launched in 1988 and relaunched in 2014.
  • Available to resident Indians and trusts.
  • Tenure - 124 months, but not fixed.
  • Minimum investment amount - Rs. 1,000; No upper limit.
  • Interest rate reviewed by the government every quarter.
• Mahlia Samman Savings Certificate:
  • A one-time new small savings scheme for women or girls
  • Available for a two-year period up to March 2025
  • Deposit facility up to Rs 2 lakh (fixed interest rate of 7.5%)
  • Partial withdrawal option

Mica:EU’S Crypto Regulation

Context

• The European Parliament has approved the world’s first set of comprehensive rules to bring largely unregulated cryptocurrency markets under the ambit of regulation by government authorities.
• The regulation, called the Markets in Crypto Assets (MiCA), will come into force after formal approval by member states.

What is the need to regulate?

• It not only harmonises the crypto industry but also gives the EU a competitive edge in its growth compared to the U.S. or the U.K. which lack regulatory clarity.
• 2022 saw some of the biggest failures and wipeouts in the crypto industry involving bankruptcies and fraud scandals, be it the collapse of the crypto exchange FTX and its spat with Binance or the failure of Terra LUNA cryptocurrency and its associated stablecoin.
• The liquidity shortage caused by these shocks led other crypto lending platforms to halt customer transfers and withdrawals before filing for bankruptcy.

What all the legislation will cover?

• Apply to:
  • It will apply to ‘cryptoassets’.
  • It will apply not only to traditional cryptocurrencies like Bitcoin and Ethereum but also to newer ones like stablecoins.
• Will not apply to:
  • It will not regulate digital assets that would qualify as transferable securities and function like shares or their equivalent and other crypto assets that already qualify as financial instruments under existing regulation.
  • It will exclude nonfungible tokens (NFTs).
  • MiCA will also not regulate central bank digital currencies issued by the European Central Bank and digital assets issued by national central banks of EU member countries.

Features of the new rules

• MiCA will impose compliance on the issuers of cryptoassets, who are defined as the “legal person who offers to the public any type of cryptoassets”.
• It will apply to cryptoasset service providers (CASPs) providing one or more of these services —
• the operation of a trading platform like CoinBase,
• custody and administration of crypto-assets on behalf of third parties (customers),
• the exchange of crypto-assets for funds/other crypto-assets,
• the execution of orders for crypto-assets,
• the placing of crypto-assets,
• providing transfer services for crypto -assets to third parties,
• providing advice on cryptoassets and
• crypto-portfolio management.
• The regulation prescribes different sets of requirements for CASPs depending on the type of cryptoassets.
• The base regime will require every CASP to get incorporated as a legal entity in the EU.
• They can get authorised in any one member country and will be allowed to conduct their services across the 27 countries.
• They will then be supervised by regulators like the European Banking Authority and the European Securities and Markets Authority, who will ensure that the companies have the required risk management and corporate governance practices in place.
• Besides authorisation, service providers of stablecoins also have to furnish key information in the form of a white paper.

Crypto regulation in India

• India is yet to have a comprehensive regulatory framework for cryptoassets.
• Indian government has taken certain steps to bring cryptocurrencies under the ambit of specific authorities and taxation.
• In the Union Budget for 2022, the Finance Ministry said that cryptocurrency trading in India has seen a “phenomenal increase” and imposed a 30% tax on income from the “transfer of any virtual digital asset.”
• In March this year, the government placed all transactions involving virtual digital assets under the purview of the Prevention of Money Laundering Act (PMLA).

Indian Exports and Imports

Context

• India’s goods exports declined for the second successive month in March, falling a sharp 13.9% to $38.38 billion while imports dipped 7.9% to $58.11 billion.

Recent Trends: Further details

• Total goods exports in 2022-23 rose 6.03% to $447.46 billion, while the import bill surged by a steeper 16.5% to $714 billion.
• The goods trade deficit rose almost 40% to over $266 billion in 2022-23, compared to $190 billion in 2021-22.
• Despite the global headwinds [Russia-Ukraine War, U.S Fed rate hikes etc], India has surpassed its 2022-23 target of $750 billion dollars to hit $770.18 billion, which is $94 billion higher than last year’s record exports.

Export Items: Performance

• India’s uptick in outbound shipments was largely led by petroleum, up 27% to $94.5 billion, followed by electronics goods that rose 7.9% to $23.6 billion.
• The other three of India’s top five export items registered insignificant growth - Rice (up 1.5%), chemicals (1%), and drugs and pharmaceuticals (0.8%). Petroleum exports now account for 21.1% of total exports, up from 16% in 2021-22.
• Engineering goods, India’s mainstay in goods exports in recent years, shrank 5.1% to $107 billion, bringing down their share in total exports from $26.6% to 23.9%.
• Non-oil exports, contracted 0.5%, and if electronics exports were excluded too, goods shipments were 2.8% lower than 2021-22, which economists called a red flag.
• Important segments like engineering and gems and jewelry witnessed negative growth.

Import Trends

• Russia
  • India’s imports from Russia grew almost 370% to over $46 billion in 2022-23. Russia’s share in import leaped from 1.6% in 2021-22 to 6.5% last year, making it the fourth largest import source nation for India, behind China, UAE and the USA.
• China
  • China’s share of goods imports dipped to 13.8% in 2022-23 from 15.4% in 2021-22.
  • However, imports from the country still grew 4.2% to reach $98.5 billion last year, while exports to China fell 28% to just $15.3 billion. Indian shipments to China now account for just 3.4% of total exports, from over 5% in 2021-22.
• Petroleum
  • Petroleum imports jumped about 30% to nearly $210 billion in 2022-23.
• Coal
  • Coal imports grew at a faster 57% to touch almost $50 billion.
• Gold
  • Gold imports, fell around 24% to $35 billion as global prices for the metal surged and the Rupee turned weaker.
• Country comparison
  • The USA remained India’s top export destination, followed by UAE, while Netherlands emerged as the third largest goods buyer, displacing China to the fourth position in 2022-23.
  • Netherlands’ share of Indian exports jumped from under 3% in 2021-22 to 4.7%, recording a staggering 66.6% uptick year-on-year.
  • Bangladesh and Hong Kong remained in India’s top 10 export markets, although the value of shipments to their shores contracted 27.8% and 9.9%, respectively.
  • The government has set a two trillion-dollar target for goods and services exports by 2030 under the new Foreign Trade policy.

India’s Recent Trade Policy

• The government unveiled its new Foreign Trade Policy (FTP) which came into force on 1 April, 2023.
• The previous policy, launched in 2015, had to be extended several times due to the pandemic and geo-political developments. 

What is the significance of FTPs?

• Under the Foreign Trade Development and Regulation Act, 1992, the government is required to formulate, implement and monitor trade policies to boost exports, facilitate imports and maintain a favourable balance of payments.
• The first five-year export-import (EXIM) policy of 1992 and the second in 1997-2002 aimed to remove many of the post-independence trade protectionist measures and promote India’s integration with the global economy.
• In 2004, the EXIM Policy was renamed FTP to adopt a comprehensive approach to India’s foreign trade. Later, FTPs were issued for 2009-14 and 2015-20.

Did the previous FTP meet its objectives?

• FTP 2015-20 aimed to boost India’s exports from $465 billion in 2013-14 to $900 billion by 2019-20.
• It introduced a new merchandise export from India scheme to provide rewards to exporters to offset infrastructural inefficiencies and associated costs and a services export from India scheme to encourage the exports of notified services.
• At the conclusion of the policy’s initial term in 2019-20, exports of goods and services reached $526.55 billion.
• Export momentum was derailed in 2020-21 by the pandemic and geopolitical tensions.

What is the duration of FTP 2023?

• The government has broken away from the conventional practice of setting a five-year cycle. The new policy is intended to be responsive to changing circumstances and will be modified as and when required.
• Additionally, the government will consistently gather input from relevant stakeholders to enhance and revise the policy.

What are its key thrust areas?

• It has four pillars. These are:
  • Replacing the incentive-based system of promoting exports with remission and entitlement-based regimes;
  • Facilitating enhanced collaboration among exporters, states, districts and indian missions;
  • Reducing transaction costs and introducing e-initiatives for ease in business operations; and
  • Developing additional export hubs.
  • It also intends to simplify the export process for items falling under the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET).

What are the goals and targets?

• The government aims to increase India’s overall exports to $2 trillion by 2030, with equal contributions from the merchandise and services sectors.
• The government also intends to encourage the use of the Indian currency in cross-border trade, aided by a new payment settlement framework introduced by the RBI in July 2022. This could be particularly advantageous in the case of countries with which India enjoys a trade surplus.

Way Ahead

• While the growth trend in exports is laudable, the national and state-level export policies must be aligned for seamless export flows to maintain the pace going forward.  To maintain the momentum, some of the key areas of focus are as follows:
• Active participation of states to strengthen export infrastructure: For smooth flow of trade, well-established facilities like air cargo, multimodal logistic hubs, ICDs, etc., are vital. Therefore, to drive India’s exports further, states must evaluate the sectoral-based interventions to improve infrastructure for cost-competitive exports.
• Mutually beneficial trade agreements: The new trade agreements must focus on sectors with higher complementarities and potential. In addition, FTA negotiation strategies must be aligned with the self-reliant strategy and the states must actively engage domestic stakeholders to bring their perspectives to the table.
• Trade Monitoring at the State level: To augment the country’s exports, it is imperative to continuously track and monitor progress of various parameters such as export growth trends, status of logistics and infrastructure facilities, progress of export action plans, progress against the gaps in indices of trades, etc at the state level. For this, a crystal-clear plan is to be developed for rigorous trade monitoring.
• With improved domestic capabilities and alignment of Government and industries’ objectives, India can become a global manufacturing powerhouse.

Illegal Mining of Ores

Why in News?

• The Indian Bureau of Mines (IBM) recently raised the alarm about widespread corruption in Odisha's illegal manganese mining and transportation industries.
• In mines other than those for coal, petroleum & natural gas, atomic minerals, and minor minerals, IBM is a multi-disciplinary government organisation under the Ministry of Mines that promotes conservation, scientific development of mineral resources, and environmental preservation.

Highlight

• Odisha is a mineral-rich State that has 43.64% of manganese, 33.61% of hematite iron ore, and 96.12% of the nation's chrome ore.
• Mining lease holders in Odisha sent low-grade manganese ore from their mines to brokers in West Bengal, who then sold it as high-grade without further processing.
• Some mining businesses in Odisha are involved in underreporting the amount of minerals produced and transported, as well as paying the proper royalties and taxes.
• The issue of manganese ore grade decline is significant because it could have an impact on the product's quality and worth, which would cause the state government to lose out on money.

About mining

• The mining industry is a key economic sector in India and makes a sizable contribution to the national economy. There are currently around 3,500 mining leases in operation throughout 23 states, totaling 316,290.55 hectares. 
• Nearly 70% of the total is made up of Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Gujarat, and Karnataka. But these natural mineral extractions frequently result in imbalances, which have a severe detrimental effect on the environment.
• Mining is the process of removing rich minerals or other geological components from the Earth, typically from an orebody, lode, vein, seam, reef, or placer deposit.
• Environmental harm is virtually always caused by mining operations, both while the mine is operating and after it has shut down.
• The majority of nations have therefore established restrictions to lessen the effect.
• Mining's importance to India's economy
• India's GDP is anticipated to expand at a rate of about 7% during the next few years.
• The nation's need for steel and power will rise as infrastructure and automobiles get a new lease of life.
• These sectors are expanding quickly and depend on the mining sector for their raw materials.

About illegal mining

• The removal of minerals, ores, or other valuable resources from land or water bodies without the required permits, licences, or regulatory clearances from public authorities is known as illegal mining.
• It may also involve breaking laws governing labour, safety, and the environment.

Challanges faced

• Large-scale displacement causes people to feel alienated and untrusting of the government apparatus, which results in complaints and inadequate rehabilitation initiatives.
• In addition to losing land, the local community is also losing their unique tribal culture and way of life.
• States with abundant natural resources like Chhattisgarh, Jharkhand, and Odisha have seen a rise in left-wing extremism.

Health and environmental issues

• The ecology has been seriously harmed by coal mining, the Makrana marble mines in Rajasthan, the granite mines in Karnataka, and the Damodar river has been severely harmed by mining for coal.
• Biodiversity and cultural heritage have been lost as a result of mining.

Administration of Justice

• Arbitrary allocations for coal mines are followed by long legal battles, annulment of allocations, and charges of corruption in block allocations. 
• Environmental approvals are delayed as a result of bureaucratic obstacles. 
• As a result of judicial intervention, investors experience lengthy delays and losses. Governments may experience a loss of revenue as a result of miners' potential failure to pay required taxes and royalties. 
• This can have a big influence on the economy, especially in places where natural resources are a big source of income. 
• Violations of Human Rights Human rights violations caused by illegal mining may also include forced labour, child labour, and the exploitation of weaker groups of people.

Governmental Efforts

• In order to establish a framework for the long-term development of the Indian mining industry, mining leases are granted a star level.
• A Memorandum of Understanding was signed in January 2016 between the Indian Bureau of Mines (IBM) and the National Remote Sensing Centre (NRSC), ISRO, to launch a pilot study on "mining activity monitoring using satellite imagery" to stop illegal mining.
• A device called the Mining Surveillance System (MSS) uses autonomous remote sensing to find unlawful mining.
• The District Mineral Foundation Fund (DMF) was formed under the Pradhan Mantri Khanij Kshetra Kalyan Yojana [PMKKKY] for the benefit of individuals and regions impacted by mining.
• To attract private exploration firms, the National Mineral Exploration Policy was developed.
• The automated route allows 100% FDI in the mining and exploration of metal and nonmetal ores.
• The state government is required to own the minerals found within its borders through an entry in List II (State List) at serial number 23.
• The central government is required to own the minerals located within India's EEZ by the entry at serial No. 54 of List I (Central List).
• This led to the creation of the Mines and Minerals (Development and Regulation) (MMDR) Act of 1957.The International Seabed Authority (ISA) oversees deep sea mineral exploration and exploitation in the international seabed region outside of the purview of national sovereignty.

Data and facts

• India's coal production increased by 8.55 percent to 777.31 million tonnes (MT) in FY 2021–22.As of 2021, India was the second-largest coal producer in the world.
• India's mineral production is anticipated to total Rs. 190,392 crore (USD 24.95 billion) in FY22.In terms of iron ore production, India comes in fourth place worldwide. 
• The amount of iron ore produced in FY21 was 204.48 MT.
• India was the world's second-largest producer of aluminium in FY21 with combined primary and secondary production of 4.1 MT annually.

Way ahead

• Drones, GPS, and other cutting-edge technologies can all be used to monitor and find unlawful mining activity. 
• To better deter unlawful mining, the legal and regulatory system surrounding mining needs to be tightened. 
• It can be accomplished by passing stricter legislation, enhancing enforcement techniques, and stiffening fines for illicit mining operations. 
• To address their concerns and make sure their operations are sustainable, mining firms should collaborate extensively with the local community.