Unlocking explosive growth with rural employment and rapid industrialization

I will, over and beyond “getting growth back” emphasize “yes…yes…we will get our growth back”

Narendra Modi, Prime Minister of India, June 2020

By Dr Amit Tripathi, Dr. V.N.Vasudev and Charles Devenish

The return of urban labor force to the rural hinterland in the aftermath of the COVID 19 pandemic has created a major societal disruption in the rural India. If mismanaged it can leave long term socioeconomic scars with unimaginable consequences. However, with ingenuity and positive thinking it may be possible to turn this liability into an asset that triggers rapid rural industrialization and explosive multi-centric economic growth leading to a unique hinterland led growth engine in India.

“…build consensus, develop concepts, think big, we will together take up more structural reforms that will change the course of our country. We will together build a self reliant India…”

Narendra Modi, Prime Minister of India, June 2020
PM Modi, Asking the industry to come up with concepts for structural reforms, June 2020

Answering the clarion call of PM Modi, the Mineral Exploration Academy has come up with a set of ideas for reforms, that if implemented, can help bring about explosive economic growth led by rural India and play a major part in reducing imports, uplifting incomes in the rural areas and support the march toward “self reliant India” आत्मनिर्भर भारत.

Two industries are intrinsically rural – agriculture and mining. Significant quantity of the skilled labour force migrating back to villages are well equipped with skills needed by the mineral industry value chain (exploration industry + mining industry + mineral based industries). By removing regulations hindering the growth of these industries, the mineral sector could become engine of rapid rural growth unleashing industrialization of rural India and causing rise of income levels in rural areas. Such income rise will have significant effect of creating demand for incrementally higher value services and products in rural areas and expansion of such urban centric businesses to the hinterland creating massive secondary employment. The solutions are quite simple but powerful:

  • Ideal and most rapid solution would be to grant the 700 odd pending mining applications (under rules 10A(2)b and 10A(2)c of the MMDR Act) with immediate effect under National Disaster Management Act with all clearances and deemed approved AND with strict social and ecological guidelines for responsible mining. Granting of all these long pending applications under Section 10A(2)(b) of MMDR Act within the next 3 months is also suggested by Dr.Rajiv Kumar, Vice Chairman of NITI Aayog in a letter addressed to the Minister of Mines. Till some time back such initiatives might have been deemed impossible. However, recent speech by PM Modi has created hope that such policy initiatives might actually happen.
  •  Federation of Indian Mining Industry (FIMI) in their letter to the Prime Minister issued warning against removing the section 10A(2)b that protects the rights of exploration companies. Removal of this article would be deemed by global industry watchers to be equivalent to the ancient barbaric socialist practice of “Nationalization” and “Expropriation of Private Property”. Any such move would severely dent investor confidence and the mineral exploration industry and mining industry would take decades to recover, if ever.
  • 10 year tax holiday for every one of these new projects that start production and employ over 200 people within one year of getting all the approvals.
  • Kick-start the mineral exploration industry by lowering the entry barriers and treating exploration companies (different from mining companies) at par with technology startups:
    • Scrap the auction policy in letter and spirit – this policy has strangulated private exploration and is against the global best practice of first come first served based licensing
    • Release government financed geology data in public domain for private geologists to review, generate exploration ideas and build commercial ventures around those ideas
    • Notify ecologically and strategically sensitive no-go areas on a public map. All other areas immediately become available for mineral exploration
    • Immediate online portal based grant of Composite Licenses on first come first served basis
    • Treat Permits (RP, PL, CL, ML, QL) as private property and allow free transfer and trading of all Permits without prior approval, whether full or in part
    • Allow unrestricted transfer of shares of lessee companies or their holding companies
    • Permit exploration industry to raise venture capital for exploration at par with tech startups
    • Encourage SEBI to permit mineral exploration industry to list on a special “ventures” exchange (in line with TMX or AIM)

Secondary spinoffs of activating these policy levers would be:

  1. Sustained and continuous decline of imports and reduced import dependence of our manufacturing domestic heavy industry
  2. Development of domestic raw material supply chain.
  3. Strategic stability and the defence industry raw materials would be supplied from reliable domestic sources
  4. Market denominated movement of mineral based manufacturing to rural areas – closer the their raw material source
  5. Growth in support for social causes and enhanced CSR from the expanding industrial base
  6. Rapid revenue growth for the government and widening of tax base
  7. Development of secondary and tertiary rural industries with rising incomes of rural areas with increasing prosperity like – banking and financial services, housing, construction, telecom, logistics and transport, automobile, education, shopping and a zillion others that would start to cater the emerging rural middle class employed directly or indirectly in mineral value chain.

Jai Hind


2 thoughts on “Unlocking explosive growth with rural employment and rapid industrialization

  1. With optimism and firm determination of the Govt. our rural economy can grow once the rapid industrialization, mining and agricultural activities are given the required impetus and support. The core idea is that if an IT person can work from home then why not our rural laborer work from his village. We must strive to create such opportunities and given the ideas of our PM such startups can be a reality very soon that will take forward traction of the engine of growth..


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