ECONOMICS PROJECT REPORT DONE BY GROUP 5 The Indian mining sector Introduction India is a country of large dimensions.

It spreads over a geographical area of 3.29 million square kilometres, which is about 2.5 per cent of the globe and makes the country the seventh largest in the world. Its population of over 1,000 million ranks it the second largest only next to China. India is Asias third and worlds eleventh largest economy. The metallurgical and mineral industries constitute the bedrock of industrial development as they provide the basic raw materials for most of the industries. India produces as many as 84 minerals comprising 4 fuel, 11 metallic, 49 nonmetallic industrial and 20 minor minerals. Their aggregate production in 19992000 was about 550 million tonnes, contributed by over 3,100 mines (reporting mines) producing coal, lignite, limestone, iron ore, bauxite, copper, lead, zinc etc. More than 80 per cent of the mineral production comes from open cast mines and therefore, one must add the quantity of overburden to that of the mineral production in order to assess the total amount of annual excavation in Indias mining sector. The mining leases numbering 9,244 are spread over 21 States on about 13,000 mineral deposits occupying about 0.7 million hectares which is 0.21 per cent of the total land mass of the country. The aggregate value of the mineral production in 1999-2000 was more than Rs. 450 billion (approximately $10 billion). The distribution of the value of mineral production shows that fuel minerals accounted for about 82% (of which solid fuels 44% and liquid /gaseous fuels is 38%), metallic minerals about 8%, non-metallic minerals 4% and the balance 6% is contributed by minor minerals. The Mineral Policy opened the gates of Indian mineral industry to domestic and foreign investment, much of which was earlier reserved for the public sector. It aims to boost the countrys exploration and mining efforts and render the mineral industry more competitive. In October 1996, the ministry of steel and mines, Government of India, issued guidelines for grant of large areas for aerial prospecting under the provisions of the amended MM(R&D) Act. As a sequel to this directive, foreign investors evinced keen interest for investment in carrying out aerial prospecting operations especially for base metals, diamond and gold in the states of Rajasthan, Maharashtra, Uttar Pradesh,Bihar & Gujarat. The total area covered for aerial prospecting in these states till March 1999 were about 71, 000 sq. kms. for minerals like copper, lead, zinc, gold, silver, diamond, cadmium, bismuth, nickel, cobalt and molybdenum. The state wise details are as follows: Rajasthan 61938 sq. km., Maharashtra 3490 sq. kms., Uttar Pradesh 2956 sq. kms., Bihar 2472 sq. kms and Gujarat 206 sq. kms. Current status of mining industry in India Mineral resources The country is having a well-developed mining sector, which has vast geological potential with over 20,000 known mineral deposits. Up to the Seventh Plan period (1990), significant progress was made in the development of mineral resources in the country which is amply depicted in the appreciation of mineral inventory. This helped the country to enter the realm

of plenty in respect of certain minerals in which it was hitherto deficient. The discovery of huge bauxite deposits, particularly in the East Coast, is a case in point, which took the country from the phase of a nonentity to one having the fifth largest inventory of bauxite in the world. In the Eighth Plan, greater emphasis was laid on mineral exploration by adoption of improved technologies like remote sensing, geotechniques, etc., particularly for those minerals in which the resource base of the country is poor such as gold, diamond, nickel, tungsten, rock phosphate, sulphur, etc. The Geological Survey of India, State Directorates of Mining and Geology, Public Sector Units like NMDC, MEC, HCL, CMPDI, HZL, BGML etc are the agencies for surveying, mapping and exploration of new deposits and reassessment of older deposits / mines.Out of the total area of 3.29 million sq. kms. of the country, systematic geological mapping of 3.15 million sq. Kms have been carried out by GSI. As a result of the cumulative efforts of the various agencies involved, considerable inventory has been added to most of the mineral deposits in the country. Today, the reserves details are available for as many as 20,000 mineral deposits all over the country. The Indian Bureau of Mines has prepared inventory of mineral deposits for the country and updates it every five years. The country is self sufficient in case of 36 minerals and, deficient in respect of a number of minerals. The search for minerals did not remain confined to landmass only. It was extended to off shore area and even deep ocean. Result was the discovery of large petroleum deposits in the Arabian Sea which came to be known as Bombay High. The exploration work in the deep ocean led to the discovery of polymetallic nodules bearing cobalt, nickel, copper and manganese at a depth of 3,000 metres. This work earned India the status of Pioneer Investor in seabed mining conferred by the United Nations. Mineral production The total number of mining leases granted in the country for different minerals as on March 1998 were 9244 covering an area of about 0.7 million hectares and spread over 255 districts in 21 states. The following ten states together account for 93% of the total leases granted: Gujarat (15%), Rajasthan (14.5%), Andhra Pradesh (14%), Madhya Pradesh (13.5%), Karnataka (11%), Tamil Nadu (7%), Orissa (6.5%), Bihar (4.7%), Goa (4.3%) and Maharashtra (2.4%). Out of 9244 mining leases, 639 (7%) leases were in the public sector covering an area of 0.47 Mha and the balance in the private sector. In all 3100 mines located in 19 states / union territories were reported to have worked during 1999-2000 of which 566 mines belong to fuel minerals, 561 to metallic minerals and 1973 to non-metallic minerals. This may not include all the mines working minor minerals in different states. There were 828 mines in public sector and the rest in private sector. About 80% of the reporting mines were concentrated in seven states namely, Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Bihar, Orissa and Karnataka. The Public Sector contributes 100% of copper, diamond, lead, silver and zinc and lignite; 98% of coal, 60% of iron ore and 50% of manganese, bauxite, chromite and dolomite in the total mineral production. The value of mineral production during 1999-2000 was estimated at Rs.452.3 billion of which the contribution from public sector was Rs.378.4 billion (84%). In the total value of mineral production, fuel minerals accounted for Rs.372.3 billion (82%), metallic minerals at Rs.34.2 billion (8%) non-metallic minerals Rs.18.3 billion (4%) and minor minerals Rs.27.6 billion (6%).

Economic issues Contribution of mining and quarrying to Gross Domestic Product (GDP) Indias gross domestic product (GDP) at factor cost at constant (1993-94) prices in 2000-01 was estimated at Rs.12117 billion as against Rs.7991 billion in 199394. The CAGR for the period 1993-94 to 2000-01 works out to be 5.3 percent. The contribution of mining and quarrying sector in GDP at constant (1993-94) prices in 2000-01 was Rs.274 billion as against Rs.197.0 billion in 1993-94. This works out to a CAGR of 4.2% for the period 1993-94 to 2000-01. The share of mining and quarrying in GDP has marginally declined from 2.47% in 1993-94 to 2.26% in 2000-01. Share of mining and mineral industry in merchandise exports and imports Exports Minerals in both raw and processed forms contribute significantly to India's exports trade. The value of exports of ores and minerals during 1998-99 was Rs.246 billion as against Rs.66.6 billion in 1990-91. The share of mineral exports to the total merchandise exports from the country in 1998-99 was 17.6%. Diamond (mostly cut) continued to be the largest constituent in the exports with a share of 81% of the mineral exports. This is followed by iron ore (6.6%), granite (4.1%) and precious and semi-precious stones (2.8%). The individual share of other ores and minerals was less than 1%. The CAGR of mineral exports for the period 1990-91 to 1998-99 works out to be 17.7%. Export of diamond (cut) was Rs.47.1 billion in 1990-91 which increased to about Rs.200.0 billion in 1998-99. Similarly imports of raw diamond which was Rs.36 billion in 1990-91 increased to Rs.155 billion in 1998-99. If diamond is excluded from total mineral exports, exports of other minerals and ore account for only about 3.1% of the countrys total merchandise exports. Therefore it has no significant impact on total exports. Since the country produces very little raw diamond, most of it is imported and is cut and polished and exported. This industry, which adds about Rs.45 billion in value to the raw diamond, employs a large workforce. Imports The value of imports of ores and minerals during 1998-99 was Rs.373.5 billion as against Rs.115.8 in 1990-91. In 1998-99 imports of ores and minerals accounted for 21% of all merchandise imported in India. In this case also, diamond (uncut) emerged as the largest constituent with a share of 42% of mineral imports, followed by crude oil 40%, coal (9.5%) and rock phosphates 2.2% and copper ores and concentrates (1.5%) and coke (1.5%). Questionnaire 1. Tell us something about yourself. well am entrepreneur by profession started my business when i was nearing to end of my college say something around 2006 since then i have different ventures and around three company registration the journey which was filled with many obstacles at every step of

my business never the less it was almighty who raked through my plans an rest is just history to be seen. I am an automobile engineer by profession and after four year of full flesh business am doing my post graduation international trade and finance management external course.

2. What is your business all about? I started my business with supply of construction material when & then just grown on with strength to strength presently our company is into construction, mining, exports. 3. What would you say are the top three skills needed to be a successful entrepreneur? Dedication, enthusiasm, and endeavour are three very essential infect the most essentials

4. What have been some of your failures, and & reasons for the same what have you learned from them? well u cant termed them as failures as such but just a moment of being more focused as u have just been outraged by complacent attitude in business it is just the way how on perceive the situation. if we think its a loss we r haunting our ability which interns affects our moral and further leads to lack of enthusiasm there is famous saying "ship at the port is very safe but ship is meant for sailing" unless we get some stick we don't learn well most of the things in business v have learned through some difficult times rather than saying failures failures is only when we shut our business and seat at home.

5. Where did your organizations funding/capital come from and how did you go about getting it? We started everything from mere zero whatever we have right now is only because it was destines to and mere faith of our clients. 6. How important is capital is in any business? well i kicked off i thought my greatest capital was my dedication passion and enthusiasm as all along it was just difficulties n difficulties as we started from zero. As years passed we understood the how to raise our funds and work accordingly. 7. How did you decide on the location for your business?

As we say everyone has to take whip so die we initially we dint stress on location part as we thought well start something which has monopoly. But almighty had different plans for us and here we are to be prcised location place very imp. role in once business.

8. Does the location affects? If yes than in what ways? Well, as far as my mining business is concerned location is the most important factor affecting my. I cannot go & start this business in Jammu & Kashmir. 9. How does changing in political environment affect your business? Its a very imp factor in business as different govt has diff polices so its some suits your style of business some does not so its blend of our attitude how we keep in tough times. 10. What policies of government you would like to change? The policy which allows us to do business in more handsome way so that we can stack some good deposit monetarily 11. What other economic factors affect your business? Economic factors we speak about it seems to be very easy but frankly its impeccable factors then runs our show like for my business exchange rate would matter, population as in availability of labourers at cheaper rate. 12. Did recession in any way affect your enterprise? It has not affected me directly yeah but relatively as there was not good liquidity of cash. 13. Where you see yourself and your business in 5 years? Definitely keeping head on our shoulder we would want to b among the top people in industry with sound reliability for our clients that would be our motto for next coming years . 14. Do you have a back-up plan?

Yeah indeed we do have it will be revealed as when required to do so else it will be premature to talk about it. 15. What are the various factors of economic environment that affects your business & in what ways? Basically we India are tax lavvy strongholds if we can figure out then around 36 implementation of tax a industrialist has to overcome that makes production cost hike up which ultimately leads to lesser profit margin. so as a industrialist whatever more monetary benefits on companys is always congratulated. so the option lies for manufacturers is to export of the produced goods but again the govt polices are such that we have to pay heavy duty pass the excise customs The very imp aspect exchange rate as the stronghold of international market US they have made all the countries to work on American dollar and has made the viable source among trades carried out among two countries. Looking at the current situation INDIAN rupee has got less value compared to DOLLAR do the same if we can raise the value of RUPEE then we could do transaction in Indian currency which will help us in future. Next up is machinery procurement as we see if we have to do some strategic planning then we have to find the source which should give more output as to fit in the actual cost. so mostly this technology savvy countries like US,GERMANY, JAPAN, CHINA, are big time producer such machinery but cost of importing makes it costlier so if govt gives subsidised on such things then overall cost could be decreased of the product. It just dont end here now the imp source for carrying further process is labour which depends upon the labour we have in house it would not have mattered for company as proper planning can deal with this problem as the labours are the one on actually runs the show, overall we would suggest the free trade keeping in mind the regulations of govt policies. 16. What is your approximate production level per year? The production per year would depend upon various factors as we have to look fixed capita variable capital the is straight answer as anything what makes handsome income after calculating all the expenses and in business whatever we achieve is less as there are other secondary plans and many more inventory plans 17. What are your expectations from government? We do have expectation from govt as we have discussed various issues up earlier as industrialist more income with less expenditure is happily acceptable so if govt satisfy our demands then we happily oblige the same. 18. Do you have any labour issues?

Labour issue is always there in any organisation it depends upon how we pursue to resolve such problems by looking the future prospective this all issues can be sorted if other ligations are taken care basically when different mentality people working together will bound to clash with ego, pride. So if govt give us relaxation then we would resolve the problems what labours face in organisation. 19. What are the effects of changing political environment on your business? As we have mentioned earlier if depends upon the govt hoe they regulate the policy by looking at greater prospect certain thing which govt can regulate they should go ahead with the same as it will help globally for everyone. the overall costing of product when we look into infrastructure as the essential commodities are getting hiked up- every fortnight there should be certain regulation where in govt has some policies for regulating prices of essential commodities which will not harm the costing of the end product now presently if we look we have different arrays of problem in aviation sector so whatever policy govt make it should be realistic by keeping in mind the greater prospect which should help the industrialist and common men.