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India's mineral sector can add Rs 4 lakh crore to GDP by doubling its contribution
May 14, 2020
NEW DELHI, 14 May 2020: Given the huge mineral wealth in India, if the sector doubles its contribution then there will be an addition of Rs 4 lakh crore to the GDP, said Dr Ajit Ranade, President & Chief Economist, Aditya Birla Group, while addressing a webinar today on 'Indian Mining & Metals Industry: Post nCovid19 and Early Revival' organized by FICCI.
The mining sector will contribute significantly in the growth of the nation's economy. While we are in an auction-based mineral allocation process, the need is to learn from recent experiences, said Dr. Ranade. He added that nCOVID19 has resulted in an economic crisis which has led to a collapse in supply, collapse in demand and financial shock. These unprecedented challenges need massive fiscal response from the government in terms of credit access and liquidity support to revive the economy.
Mr A K Chaudhary, Chairman, Steel Authority of India Ltd. & Chair, FICCI Steel Committee, said that mining is a cost and labor incentive sector and in the present crisis, the cost of production has increased with a decrease in demand. He added that the government is taking measures to revive demand and now industry needs to work towards improving efficiency and demand while reducing the cost of production and upgrading technology in the sector. He emphasized on the need for having demand revival soon for the recovery of Indian steel industry.
Mr Tuhin Mukherjee, Managing Director, Essel Mining & Industries Ltd. and Chair, FICCI Mining Committee, said that there has been a contraction in demand and operational issues have come up in the sector due to the pandemic crisis. Besides, there has been a shortage of workforce and opportunity for new exploration has also been lost due to the lockdown. Hence, the need is to deliberate on these issues to give a thrust to the sector.
Mr Satish Pai, Managing Director, Hindalco Industries and Chair, FICCI Non-ferrous Metals Committee, urged the government to cut down unnecessary imports and incentivize exports. He underlined that though aluminum production is high, India still imports it and added that export schemes should be swiftly put in place to reduce imports.
Mr R Saravanabhavan, NITI Aayog and the Government Participants, urged the industry to share detailed recommendations to resolve the issues faced by them and assured for an early resolution of industry challenges.
Mr Dilip Chenoy, Secretary General, FICCI, said that as highlighted by the Prime Minister Mr Narendra Modi, the mining and metal sector needs to become self-reliant. He added that the aim should be to make the domestic mining and metal industry more competitive while utilizing domestic resources to exploit opportunities present in the value chain of the industry. Highlighting the dependence of sectors like infrastructure, transportation, telecom, automobiles etc on mining & metals, he emphasized on an early revival of the sector.
Mr Arun Mishra, Deputy CEO, Vedanta Ltd., said that nCOVID19 has brought phenomenal structural changes to the sector which are going to stay. Though, domestically the demand will be less, the sector needs to restart its activities while re-engaging laborers.
Mr Niladri Bhattacharjee, Partner (Metals & Mining), KPMG, in his presentation highlighted that the government should provide sector-specific stimulus packages for critical core sectors and give incentives to revive back soon.
Mr Rajib Maitra, Director (Mining, Metals & Industrial), Deloitte Consulting, underlined the potential measures that the government could take to revitalize the sector. He added that with contraction in domestic demand, the industry is focusing on export markets.