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Thursday 9 April 2020

Mines lapse: More than 260K people to get unemployed

On the list of the lapsing mines are 48 operative leases, whose shutdown will lead to 60 mt deficit in raw material supplies, mainly iron ore

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Bhubaneswar: More than 2,60,000 people are in danger of losing their jobs, direct and indirect, because of the lapsing of merchant mines by March next year. This story is unfolding when the country is in the throes of its worst employment crisis in more than 40 years.

According to the National Sample Survey Organisation (NSSO) data, the unemployment rate rose from 2.2% in 2011-12 to 6.1% in 2017-18 with the workforce shrinking by 47 million.

The labour force participation rate during this period dipped from 55.9% to 49.8%.

The validity of 329 mining leases will cease by 31 March, causing job losses for 2,64,000. On the list of the lapsing mines are 48 operative leases, whose shutdown will lead to a deficit of around 60 million tonnes (mt) in raw material supply, mainly iron ore.

As a fallout of the Supreme Court’s orders on mining in Odisha, Jharkhand, Goa, and Karnataka, 2,00,000 people directly engaged in mining have lost their livelihood.

The orders also meant that the livelihoods of 10 times the pool of the direct employed were affected. While an order passed by the Supreme Court brought mining in Goa to a halt, other pronouncements have crippled the pace of mining in Karnataka, Odisha, and Jharkhand.

“Given the present unemployment crisis in the country, it is believed that employment-intensive growth is the key to utilising India’s demographic dividend and ensuring a remarkable growth story. If managed effectively, the mining sector with 0.52 employment elasticity can generate around 13 times more employment than the agriculture sector and six times more employment than the manufacturing sector for every 1% increase in the sector’s GDP, pointing towards the relatively high employment generation ability of the sector,” said RK Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI).

More than 260,000 people in danger of losing jobs over lapsing minesThe country’s mining sector (excluding petroleum and natural gas) directly employed 2.32 million in 2012 and sustain the livelihoods of 23 million. If backed by favourable government intervention, the mining sector has the potential to spawn direct and indirect jobs for 50 million people by 2025, FIMI has estimated.

“Due to a mix of lopsided policies and poor policy implementation, India’s mining industry is in chaos. In the past decade, many mines have been closed down or suspended due to judicial intervention,” said a mining industry source.

Mining is next only to construction, finance and real estate in generating job per unit increase in the sectoral gross domestic product (GDP).

According to the erstwhile Planning Commission’s 12th Five-Year Plan (2012-17), the mining sector boasts an employment elasticity of 0.52%, far exceeding 0.04% for agriculture and 0.09% for manufacturing. For every 1% hike in economic growth, the mining sector creates 13 times more employment than agriculture and beats the manufacturing sector six times over in job creation.

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