Vedanta chief eyes NMDC, rest of HZL and other mining PSUs
24 Jun 2019
Vedanta Resources chairman and mining and metals tycoon Anil Agarwal wants the government to exit mining business and divest all five mining firms, including NMDC and HZL to private entrepreneurs, as, according to him, the government has no business to be in the business.
By privatising the five mining firms the government could save some of the $400 billion that India spends annually on imports, Agarwal told Prime Minister Narendra Modi during a pre-Budget meeting with industrialists and economists.
The government, he said, should divest its stake in at least five PSUs - NMDC, Hindustan Zinc, Hindustan Copper, Kolar Gold Fields, Uranium Corporation. He also wanted the government to exit shipping business and divest stake in Shipping Corporation of India.
Agarwal, whose Sterlite copper has been shut for years over charges of causing pollution, said the government should trust business and support their spirit to boost the economy and create jobs.
Agarwal, who was one of the three industrialists invited for a pre-budget meeting that Modi had with over 40 economists and sectoral experts on 22 June, said privatisation would help improve efficiency and raise output without job loss, thereby giving a big boost to the economy.
Another corporate sector invitee Tata Group chairman N Chandrasekaran gave recommendations on manufacturing and services sectors, while ITC chairman Sanjiv Puri spoke on need for value addition.
Agarwal’s Vedanta had acquired 64.9 per cent government stake in Hindustan Zinc Ltd (HZL) in 2002-2003. The government continues to hold 29.5 per cent stake in HZL, which the company wants to buy.
Agarwal said India's import bill of $400 billion will soon be $1 trillion if it does not ramp up production of oil and gas, minerals and metals such as gold.
By doubling oil production and raising gold output to 300 tonnes, the entire current account deficit (CAD) will be wiped out, he said.
Agarwal, who was asked to give suggestions on mining and natural resources, said the government should also divest stake in the Shipping Corporation of India.
He suggested farming out of 200 mining blocks and big blocks of coal, bauxite, copper and iron through auctions, adding that investors shold be allowed todecide on output levels.
He wanted the government to extend oil block contracts on the same terms, without imposing retrospective tax. Also, all forest and environment clearances should come in 60 days and corporate tax should be reduced to 20 per cent from current 30 per cent.
Agarwal also allayed fears of job loss citing the example of Hindustan Zinc Ltd. He said when his group acquired majority stake in the company, it had 5,000 employees. Today it has 25,000 employees, he pointed out.
He said focused mining can add $500 billion to the economy and create 20 million jobs.
Agarwal also suggested autonomy to public sector companies and banks by bringing down government holding to 50 per cent and making them board-run like Petronet LNG Ltd.
The meeting was convened in the backdrop of India's economic growth slowing to a five-year low with falling industrial and manufacturing output numbers, dwindling sales of automobiles and a subsequent fall in fuel consumption.
Agrarian crisis and unemployment are some other challenges that the government is widely expected to confront through policy initiatives in the Budget to be presented on 5 July.
During the session, participants shared their views, in five distinct groups, on the economic themes of macro-economy and employment, agriculture and water resources, exports, education, and health.
In his intervention, the prime minister thanked various participants for their suggestions and observations, on various aspects of the economy.
The meeting was also attended by union ministers Piyush Goyal and Rao Inderjeet Singh. The vice chairman of NITI Aayog Rajiv Kumar and senior officials from the union government and NITI Aayog were also present.