Indian industry body seeks liberal credit for small, medium miners
KOLKATA (miningweekly.com) - The Indian government should relax the norms for credit flow to miners the country classifies as small and medium enterprises to reverse the contraction of growth in the mining industry, industry's apex body, the Federation of Indian Chambers of Commerce and Industry (Ficci), said.
“Banks and financial institutions were often averse to granting credit to small- and medium-scale miners not in possession of heavy equipment and machinery. The financial institutions should liberalise credit approvals based on valuations of mineral reserves instead,” the industry body said.
It pointed out that even though a large number of small and medium mines made a significant contribution to metallic and non-metallic minerals, production from this sector was stagnant largely owing to a shortage of short- and long-term capital required for expansion of operations.
According to Ficci, despite liberalisation of licensing, granting of leases for most minerals and the introduction of an ‘open sky policy’ on nonexclusivity of reconnaissance work, the mining sector has suffered negative growth for two consecutive years.
During 2011/12, the mining sector registered a negative growth of 0.6% and in 2012/13 the trend was maintained, with further contraction of 0.6% having an adverse overall impact on the economy, Ficci said.
The industry body advocated the granting of core sector status to the mining industry as was the case in Australia, Canada and the US.
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