GOVERNMENT OF INDIA

MINISTRY OF PLANNING

RAJYASABHA

STARRED QUESTION NO.174*

TO BE ANSWERED ON 11.08.2011

HIGH-POWERED COMMITTEE FOR NATURAL RESOURCES

*174. SHRI RAJEEV CHANDRASEKHAR:

Will the PRIME MINISTER be pleased to state:

(a) Whether Government has constituted a high-powered Committee to devise a consistent and transparent policy for allocation of scarce natural resources like land, water, minerals etc.;

(b) If so, the composition of the Committee;

(c) Whether the Committee has submitted its Report;

(d) If so, the details thereof; and

(e) If not, by when it is likely to do so?

ANSWER

MINISTER OF STATE FOR PLANNING, SCIENCE &TECHNOLOGY AND EARTH SCIENCES

(DR.ASHWANI KUMAR)

(a)  To (e): A statement is laid on the Table of the House.

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF RAJYA SABHA STARRED QUESTION NO.174* REGARDING "HIGH POWERED COMMITTEE FOR NATURAL RESOURCES" BY SHRI RAJEEV CHANDRASEKHAR DUE FOR ANSWER ON 11^th  AUGUST 2011

(a)Yes, Sir.

(b) The Committee was constituted on 31st January 2011 under the chairmanship of Shri Ashok Chawla, the then Finance Secretary. The Composition of the Committee is as under:

 Terms of Reference of the Committee were:

1. To identify major natural resources which are allotted/allocated/distributed by the Government of India and the institutional framework for utilization of such resources;
2. To examine the efficacy and suitability of existing legal and regulatory frameworks and rules and procedures in this regard;
3. To suggest measures to optimize the benefits of such utilization for all stakeholders, while ensuring sustainability of the resources.
4. To suggest measures for promoting transparency and enhancing effectiveness in allocation, pricing and utilization of these resources.
5. To suggest changes in legal, institutional and regulatory framework to implement the above recommendations; and
6. Any other issue(s) related to the above.

(c) Yes, Sir. The Committee submitted its report on 11th May 2011.

 (d) The Committee deliberated on its Terms of Reference and decided to restrict its deliberations to those natural resources in which the Union Government or its agencies have substantial role in their allocation. Based on this consideration, the Committee identified coal, minerals, petroleum and natural gas, spectrum, forests, water and land with Central Government and its agencies for detailed analysis. The Committee felt that many of these subjects were administered and regulated by states and local governments. However, Union Government still had a major role to play in articulating policy framework which influenced the manner of their allocation.

The Committee in its deliberations grappled with the central problem of transparency, effectiveness and sustainability. It also considered the issue of revenue maximization vis-à-vis protection of public interest. These issues were discussed thread bare with the Ministries of Coal, Mines, Petroleum & Natural Gas, Telecom, Environment and Forests, Water Resources and Land Resources. The Committee has also noted proposed policies and regulatory changes being contemplated by the Ministries dealing with identified natural resources and made suggestions for improvements/modifications in the policies/regulations under consideration. The thrust of the Committee's recommendations is generally to move towards a transparent auction for allocation and pricing of identified natural resources except in cases where an alternate mode subserves the larger public interest or where the auction route is not feasible on account of different reasons depending upon the nature of the natural resources and special conditions attached thereto.

In case of mines and coal blocks, the Committee has made a number of recommendations for increasing transparency in the auction processes and move to a market~ mechanism. In the short term i.e. over the next two years it recommends creation of a platform owned by CIL for transaction of coal and allowing existing allottees of captive blocks to sell coal through this coal platform to notified users. In case of mines, which is a State subject, the proposed MMDR Act is a significant step towards reform of the mining industry. The Committee has recognized this fact and made certain suggestions for improving transparency in the bidding processes.

 In case of Petroleum the Committee noted the NELP award process which is well established. It, however, recommends that Director General of Hydrocarbons should be reconstituted in to an independent technical office attached to the Ministry and establish an upstream regulator to focus on regulatory functions. It recommends that upstream regulator can be part of the Petroleum and Natural Gas Regulatory Board (PNGRB). In case of gas, the market related prices may be made mandatory for new gas discoveries. The Committee has recommended full allocation of gas for fertilizer plants at subsidized rates and suggested a gradual freeing of pricing for power sector so that gas based power stations ultimately become  peaking facilities, which is the best use of natural gas.

In case of Spectrum, the Committee recommends that all future telecom licenses should be unified licenses and spectrum should be de-linked from the licenses. The spectrum for telecom access services should be made available through suitable market related processes. Its major recommendation in regard to spectrum is that Merger and Acquisition guidelines should be liberalized to ensure competition. Spectrum sharing and issue of spectrum trading should also be looked by the Ministry at an appropriate stage.

The Committee has recommended to establish an ab-initio classification of forest based on ecological value to improve the predictability of clearances for diversion of forest land. The Minutes of meetings of various statutory bodies under Ministry of Environment and Forest should be made available on the website of Ministry to ensure transparency. Payments under the Net Present Value Regime for forest land should be suitably readjusted as forest land has value over and above the value of only land.

The Committee has made a number of recommendations on land available with Central Government Departments and Organizations. It has recommended creation of an institutional framework for a centralized and transparent data bank which would include the ownership details, area allotted and possible land users along with actual status with· regard to utilization in addition to the satellite images and GIS mapping. Central Government departments need to utilize the land for most optimum use as well as maximum permissible F.A.R. This exercise is likely to generate surplus land resources for other alternative users.

In case of water, the Committee recommends a comprehensive national legislation. Water could either be brought under concurrent list or a framework law could be enacted which could then be adopted by the State Governments. It has also recommended an amendment to River Board Acts, 1956 to include ground water in its ambit while assigning the River Board Act a managerial role in the management of water resources.

The Committee has also made certain recommendations on overarching issues relating to policy documents, broad institutional ground rules for Regulators and allocation of functions. It has also recommended that transparent mechanisms of allocation of natural resources need to be supported by investment in complimentary physical and social infrastructure in order for markets to work effectively and for processes to be efficient and sustainable.

(e) The Committee has already submitted its report.

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