Economics of Mining and Accumulation of Resources

The mining industry is essential to both national and global wealth. Since the Mines and Minerals (Development and Regulation) Act (MMDR) was introduced in 1957, India has adopted a regulatory state approach in the mining industry. Mining resources have traditionally been under state control, with a particular emphasis on regulatory action to advance national development. The Mines and Minerals (Development and Regulation) Act of 1957, which established India’s mining royalty system, has drawn criticism for being insensitive to mine profitability and regressive. Royalties, which are mostly based on antiquated pricing processes, have remained out of date despite the expansion of the mining industry, favoring industrial capital at the expense of public revenue. India’s mining sector functions within a special framework in which mineral resources are viewed as a strategic tool for the expansion of private capital and industrial development rather than just as a commercial asset. This model, which is controlled by state intervention, seeks to match mineral extraction with more general national objectives of equity and economic prosperity. But even when the state owns the resources, the economic gains have frequently not been enough to promote sustainable development or alleviate the inequalities in communities and regions with abundant resources.