Challenges of Mining in India


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"The recent global macroeconomic uncertainties including plummeting commodity price cycles, currency devaluation in Brazil, the cost reduction strategies of the firm, the falling economic growth in China, the lowering capital expenditure (CAPEX) investment on infrastructure projects have had tremendous impact on the firm level competitiveness and the underlying earnings before interest, depreciation, taxes and amortization (EBIDTA) of mining firms, inevitably affecting mining in India as well. The turmoil in the European Union and the Quantitative Easing in USA can also affect the mining firms in terms of financing and trade.

Despite the increasing recognition by economists, mining executives and macro policy makers on the impact of macroeconomic policies on the competitiveness of mining sector, there is hardly any systematic analysis on this issue. This paper attempts to bridge this gap by exploring the impact of macroeconomic policies—especially fiscal policy on mining in India. The question relevant to ask here is, whether efforts to increase the fiscal space through additional taxes and levies and tying up fresh auctions with royalty is burdening  mining in India, which is already overburdened by ‘tax terrorism

  • ₹ 25.00

    By Samiksha Agarwal and Lekha Chakraborty

    India has the onerous distinction of having the highest taxation and royalty rates for the mining sector. This mars the overall competitive edge of mining firms.

    The authors are Research Scholar and Associate Professor, National Institute of Public Finance and Policy, New Delhi, respectively.

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