Munich Personal RePEc Archive

The Political Economy of Mining regulations 2015: Spatial Inequality and Resource Curse in Two New States, India

Chakraborty, Lekha S and Garg, Shatakshi (2015): The Political Economy of Mining regulations 2015: Spatial Inequality and Resource Curse in Two New States, India.

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Abstract

It is striking why the resource-rich States in India are income poor. This calls for analyzing the fiscal policy practices in the resource-rich new States, particularly the fiscal space created by the mining proceeds; and in turn what the fiscal space is used for. Inquiring the “use of mining fiscal space” has high policy relevance in India, against the backdrop of recent Mines and Minerals Development and Regulation (MMDR) Amendment Bill, 2015. Such policy imperatives are comparable to the global initiatives like “oil-to-cash policy”. This paper explores the plausible impacts of MMDR 2015 (9B), which stipulates a portion of mining royalty and auction proceeds to redress the resource curse. Though nebulous estimates from the coal auction proceeds are on board, ambiguity remains how the newly generated fiscal space would resolve spatial inequalities.

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