Vedanta Resources chairman urges government of India to privatise mining firms to cut down $400 billion of imports

Anil Agarwal, the billionaire metals tycoon, has told Prime Minister Narendra Modi that the Centre should privatise five mining firms including NMDC to save some of the $400 billion that India spends annually on imports.

The Vedanta Resources chairman, who was one of the three industrialists invited for a pre-Budget meeting that Modi had with over 40 economists and sectoral experts last week, also said privatisation without job loss can help boost the economy by bringing in efficiency and raising domestic output.

The other two corporate honchos invited to the interaction were Tata Group Chairman N Chandrasekaran, who gave recommendations on manufacturing and services sectors, and ITC Chairman Sanjiv Puri, who spoke on value addition in the economy.

Agarwal gave suggestions on mining and natural resources. In an interview to the Press Trust of India (PTI), Agarwal said that the government should divest its stake in at least five PSUs such as Hindustan Zinc, Hindustan Copper, Kolar Gold, Uranium Corporation, Shipping Corporation of India and NMDC.  “When we bought majority stake in Hindustan Zinc Ltd, it had 5,000 employees. Today it has 25,000 employees,” he added.

Vedanta had acquired 64.9 per cent government stake in Hindustan Zinc Ltd (HZL) during 2002-2003. The government continues to hold 29.5 per cent stake in HZL, which the company wants to buy.

Agarwal said India’s import bill of $400 billion will soon be $1 trillion if it does not ramp up production of oil and gas, minerals and metals such as gold. “If we can double the oil production and raise gold output to 300 tonnes, the entire current account deficit (CAD) will be wiped out,” he said.

His other suggestions included giving autonomy to public sector companies and banks by bringing down government holding to 50 per cent and making them board-run just like Petronet LNG Ltd, the nation’s biggest natural gas importer.

Mining in 200 blocks should be approved immediately and big blocks of coal, bauxite, copper and iron ore should be auctioned, he said, adding there should be no production cap such as ones existing in Goa and Karnataka on iron ore.

Increased mining can add $500 billion to the economy and create two crore jobs, he emphasised.

Existing oil block contracts should be extended on the same terms and no retrospective tax should be imposed. Also, all forest and environment clearances should come in 60 days and corporate tax should be reduced to 20 per cent from current 30 per cent, Agarwal said. Natural resources and electronics hold massive potential to create jobs, he said, adding India should focus on sustainable exploitation of underground resources.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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