Finance ministry keen on PPP in gold mining

Finance ministry keen on PPP in gold miningNEW DELHI: After public private partnerships in railways, highways and oil and gas exploration, the government is considering opening up the gold mining sector to explore and produce the yellow metal under PPP mode.

The finance ministry has floated a concept paper and is pursuing it keenly with the mines ministry. After a review meeting in the finance ministry recently, a reminder was sent to the mines ministry to expedite the proposal sent to it by North Block.

Finance minister P Chidambaram's hunt for gold is also driven by the limited options available to the government to bring down the current account deficit which is mainly affected by largescale import of the yellow metal - nearly 800 tonnes a year.

In 2012-13, India imported 850 tonnes of gold valued at $58 billion (more than Rs 3 lakh crore at current dollar prices) and it was one of the major causes of the burgeoning current account deficit. In the current fiscal, gold import is estimated to be around 800 tonnes. Around 400 tonnes of gold has been imported in the first half of the fiscal till September. Only a fraction of this is exported in the form of jewellery.

Industry experts say India has at least 40 potential gold mines. Currently, gold is mined at three locations in Karnataka and Jharkhand producing around 2.50 tonnes a year. Estimates by the Planning Commission put domestic gold production at 44 tonnes during the 12th five-year plan period, which could go up to 100 tonnes by 2025.

The finance ministry's enthusiasm to open up the mining sector is, however, not shared by the mines ministry, which is sitting over its proposal and has not responded to repeated communications.

To bring down gold imports, the government had raised duty on the yellow metal from 6% to 10%, followed by RBI imposing curbs linking it to compulsory export of processed gold up to 20% of imports.

In addition to hiking the import duty on gold, duties on silver and platinum were also raised to 10%. The government in August also put a ban on import of gold coins and medallions. md. aquil alam                                                                 pgdm 1st sem