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Between Rock, Sand and a Hard Place

August 11, 2013 in Economics

By Swaminathan S. Anklesaria Aiyar

Swaminathan S. Anklesaria Aiyar

In several areas, Indian rules and regulations make honest business impossible. The only choice is illegal business or no business. This underlies the suspension of Durga Sakthi Nagpal, the IAS officer in Uttar Pradesh who took on the sand mafia and paid a heavy price.

Sand is essential for construction. Sand, gravel and cement are mixed to produce concrete. But an acute sand shortage has been created by licensing and environmental bottlenecks. So, mafia groups are mining river beds illegally across India. It’s easy: one mechanical excavator can extract several truckloads of sand every night.

Sand helps retain monsoon water in river beds, releasing the water gradually in the dry season. Excessive mining endangers this. Central and state governments have detailed environmental rules for extraction, made even tougher by court interventions. Ideally, we should have environmentally safe mining that meets rising construction demand.

Instead we have grossly insufficient legal mining, huge illegal mining, sand scarcity for construction, and big illegal profits split between the mafia and politicians.

A former cabinet minister recently declared that political parties are now funded mainly by the mafia, not by big business. This again is part of the untold Durga Sakthi story.

Politicians used to demand bribes for mining licences. Now, they deliberately hold back leases to make sand scarcer, and more profitable. One news report from Lucknow says that Uttar Pradesh used to allot 2,800-3,000 leases per year for mining sand, gravel and boulders. But in the last year, the number of leases has come down to 1,900. According to one officer, not a single legal mine exists in the districts of Pratapgarh, Jaunpur, Varanasi and Bijnor: old leases have expired but no new ones have been. UP politicians have first created and then exploited a grave sand shortage. Other states are not far behind.

The courts have unwittingly worsened the situation. Acting on NGO petitions, the Supreme Court had laid down detailed guidelines for environmental scrutiny of larger sand tracts, but left the states free to deal with small patches. But after the Durga Sakthi incident, the National Green Tribunal has banned sand mining on even the smallest areas without clearance from the Ministry of Environment and Forests or the State Environment Impact Assessment Authority.

This is well-intentioned, but has immediately worsened the sand scarcity and made illegal mining more profitable. The stock market price of all cement companies has slumped, since a shortage of sand means …read more

Source: OP-EDS

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