Resumption of Mining Activities: A Herculean task ahead...

The recent Supreme Court ruling on the mining industry has far reaching repercussions. Exports of iron ore have stopped and we have lost a foothold in the world market. Our own industry would now need time to revive. Could we have adopted any other way to stop the illegal activities but maintain the tempo of exports and overcome the current impasse?

It all began with the findings of the Lokayukta report on the state of affairs of the mining industry in Bellary, in particular, and Karnataka, in general, resulting in the debarring of iron ore exports and the illegalities associated with it.

 

The Supreme Court had appointed the Central Empowered Committee (CEC) to investigate the matter. After a detailed study, the recommendations were submitted to the Supreme Court, as a sequel to which, 49 mining leases were cancelled in Karnataka. Mines on the border of Andhra-Karnataka have also been debarred from carrying out any mining operations until clear land-border demarcation has taken place. No time-frame has been fixed for this demarcation to take place.

 

The CEC had classified the mines into three categories; those with no illegalities were grouped as ‘A’ while those with maximum illegalities were put in category ‘C’.  The apex court had observed that sales made by these ‘C’ category mines should be forfeited to the state. The court has lifted the embargo on the issue of granting fresh (or new) mining leases.

 

In the case of mines classified as ‘B’, they have been directed to compensate the exchequer for the losses caused by them. Full details are to be studied further.

 

Prima facie, the 45 mines in ‘A’ category and the 70 in ‘B’ category would now be able to re-start their operations.  However, as these mines were closed down in 2011, it is not an easy task to revive the operations overnight. The logistics are daunting; experienced labour may have possibly moved to other areas; all the unused, rusted and abandoned equipment will have to be completely checked, possibly overhauled and maintenance repairs carried out before they can be put into operational use. The industry has shown relief that at least now 115 mines can plan their revival programmes.

 

It will therefore, take some time and great efforts to start and increase the production to 20 million tonnes (MT) to 21 MT, a reachable target, once all other things are in place. But this may be possible over a span of 16 to 18 months at the earliest, if the owners are able to put their heart and soul into the mines. 

 

China, the main importer, in the meantime, has also located other sources of supply and the steel industry, on the whole, did not have a great year or two to report!  Now, when India wants to revive its Chinese connection, it is most likely that they may demand their pound of flesh!

 

In such a scenario, it is most likely that the iron ore produced would find its way to meet the demand of the indigenous producers themselves and would help the industry. The international prices are lower today than they were two years ago and so the recovery factor is too early to predict.

 

On top of these, various clearances and approvals that are part of the relicensing procedure for mining to recommence production will have to be complied with. It is anybody's guess if it can be achieved in a short span of time and if so, at what cost?

 

And this is probably the first time such a major event has taken place in our mining history.

 

Just a thought—would it have helped if instead of simply banning the exports in totality, allowing the shipments to take place without hindrance, carrying on the investigations, but realise the payment and keep it in an escrow account with the government, till the matter was resolved?

 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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Aadhaar: Who owns the UID database? –Part II

Those enrolling on the UID database have not been informed that their data is to yield profit for the UIDAI, Rs288.15 crore a year and its only investor, the government, does not even own the data. How many in the government are even aware of this investing of ownership in an entity that continues to remain deliberately undefined and opaque

The Unique Identification Authority of India (UIDAI) was set up by an executive notification dated 28 January 2009. As per the notification, the Planning Commission was to be the nodal agency “for providing logistics, planning and budgetary support” and to “provide initial office and IT infrastructure”. As part of its “role and responsibilities”, the UIDAI was to “issue necessary instructions to agencies that undertake creation of databases, to ensure standardisation of data elements that are collected and digitised and enable collation and correlation with UID and its partner databases”. It was to “take necessary steps to ensure collation of the National Population Register (NPR) with the UID”. And, the UIDAI “shall own and operate” the UID database.

 

In July 2009, Nandan Nilekani was appointed as the chairman of the UIDAI, representing a lateral entry of a person from the private sector into the government, with the rank of a Cabinet minister.

 

The UID project proceeded without a law, despite the seriousness of privacy and security concerns till, caving in to public pressure, a draft Bill was prepared by the UIDAI in June 2010; and it was not till December 2010, after the project had begun to collect resident data, that this Bill was introduced in Parliament. The Bill stayed close to the framework for corporate control over databases that was later enunciated in the report of Technology Advisory Group on Unique Projects (TAG-UP) of which Mr Nilekani was the chair, and which gave its report in January 2011.

 

The Bill to give statutory status to the UIDAI was roundly rejected by the Parliamentary Standing Committee on Finance in December 2011. The Parliamentary Committee recommended that both the Bill and the UID project be sent back to the drawing board. There has been no effort since to reintroduce the Bill. Every time the UIDAI is confronted with questions about the legality of its enterprise, its officers assert that the executive order of 28 January 2009 is the legal instrument from which they derive their authority; and that order makes them the ‘owner’ of the database.

 

In the context of the UID project:

Residents from whom the data is being collected have not been informed that the government is not the owner of the data, or of the database; nor what the legal status of the ownership by the UIDAI will mean for the citizen/resident;

the UIDAI set up a Biometrics Standards Committee in September 2009, which gave its report in December 2009. Its report reveals that the UIDAI intended to “create a platform to first collect identity details of residents, and subsequently perform identity authentication services that can be used by government and commercial service providers”;

the “UIDAI Strategy Overview”, in April 2010, estimated that it would generate Rs288.15 crore annual revenue through address and biometric authentication once it reaches steady state, where authentication services for new mobile connections, PAN cards, gas connections, passports, LIC policies, credit cards, bank accounts, airline check-in, would net this profit. Those enrolling on the UID database have not been informed that their data is to be yield profit for the UIDAI; they were perhaps expected to read up from the UIDAI website.

as set out in the TAG-UP report, the data we think we are giving to the government is to end up on the database of what will be in the nature of a private company once it reaches steady state. When it is still a start-up, and till it reaches steady state at least, it will be funded by the government. After that, the government, like other commercial service providers, will become the customer of the UIDAI;

with the UIDAI owning the database, the column in the UIDAI enrolment form for “information sharing consent” acquires a new significance. The UIDAI has all along been claiming that it will only be providing authentication by saying ‘yes’ or ‘no’, and nothing more. But, when the consent to share information is recorded on the database as having been given, the UIDAI may give all data on their database to any “service provider”, a term of wide and undefined import. That is, it is not only authentication services that the UIDAI will provide; through this consent, it is also assuming the authority to make money on the data that it holds, both demographic and biometric. This will provide it one more avenue to find customers, and one more product to market. Mr Nilekani often refers to the UID database as “open architecture”, and avows that a wide array of applications can be built on it;

the claim that enrolment is voluntary has rung hollow for some time now. For one thing, the UIDAI plainly has no authority to compel anyone to enrol or to use their service. However, the UIDAI has been hard at work urging governments, banks, oil companies and other institutions to adopt the UID, to re-engineer their databases to fit the UID and to seed all their systems with the UID. The push is for ubiquity. The UIDAI has been complicit in the coercion and bullying that is now part of the UID enrolment process, and its silent acquiescence while people are threatened with exclusion from services and benefits if they have not enrolled, for a UID is one dimension of complicity. It is easy to understand why this is happening, for, as critics have observed, the services, and the people, have little to gain from the UID, while the UIDAI finds compulsion an easy way to expand their database;

the non-existence of a law that says where the liability will lie in the event of identity fraud, or failure of the system of authentication resulting in denial of services, for instance, places the burden on the individual with no responsibility on the UIDAI for the consequences of the failures of fraud;

while ubiquity of the UID would be a recipe for tracking, profiling, tagging, converging of databases and result in violations of privacy in which ways that could threaten personal security, this would become a mere incidence of the business, leaving the resident/citizen unprotected;

the 2009 notification that set up the UIDAI says that the UIDAI is to “take necessary steps to ensure collation of the NPR (National Population Register) with the UID”. Registering in the NPR is compulsory under the Citizenship Act and the Citizenship Rules of 2003. Although biometrics is not within the mandate of the NPR, they have also been collected in the process of building up the NPR database. Therefore, the data mandated to be given to the NPR is being handed over to the UIDAI to be ‘owned’ by the UIDAI!

 

I wonder how many in government are even aware of this investing of ownership in an entity that continues to remain deliberately undefined and opaque.

 

References

  • Notification No. A-43011/02/2009-Admn.I dated 28 January, 2009 published in Part I, section 2 of the Gazette of India
  • UIDAI Strategy Overview: Creating a Unique Identity Number for Every Resident in India, UIDAI, Planning Commission, GoI, April 2010
  • Standing Committee on Finance (2011-12), National Identification Authority of India Bill 2010, Forty-second Report, Lok Sabha Secretariat, December 2011
  • Report of the Technology Advisory Group for Unique Projects, Ministry of Finance, January 31, 2011
  • Biometrics Design Standards for UID Applications, prepared by the UIDAI Committee on Biometrics, December 2009.

    Read Part I of the series over here:Aadhaar: Private ownership of UID data- Part I

 

(Dr Usha Ramanathan is an independent law researcher and has been critically following the policy and practices of the UIDAI since 2009)
 

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COMMENTS

lite

2 years ago

Terrorist!

CA PRADEEP AGARWAL

4 years ago

Mr Nayak, How will we tackle corruption, it is anybody's guess, because it has gone to the veins and lifeline of all, when I say all, it means all? Please comment

Naresh Nayak

4 years ago

Collection of data of private citizens by the Government is a violation of our constitutional rights. Based on this data we will lose our right to SOCIAL EQUALITY because the Government will discriminate as a result of the data. I'm sure this violates several other rights. No wonder the UK discarded the project.


nareshnayak.wordpress.com

REPLY

CA PRADEEP AGARWAL

In Reply to Naresh Nayak 4 years ago

Who will fight for our rights?
Further who will listen that our rights are being crushed with impunity and nobody to look after, everybody is a silent spectator. Will India Discard the project....?

Naresh Nayak

In Reply to CA PRADEEP AGARWAL 4 years ago

You can't. The only thing you can do is prepare to flee to a foreign land where the laws are different. Countries respect foreigners if you especially bring dollars to the economy. Another way is to keep your head down when things get aggressive from the Government.

CA PRADEEP AGARWAL

In Reply to Naresh Nayak 4 years ago

Mr Nayak is the ruling dispensation least concerned about your or anybody's rights or are concerned with cornering money means hardly matters? or their slipping vote bank, please be frank enough to answer, I have read your articles on the web?

Naresh Nayak

In Reply to CA PRADEEP AGARWAL 4 years ago

Austrian Economics says that people act out of self interest and so did Adam Smith say the same thing. Governments are after all people who will act in their own self interest and will use all powers available at their disposal to preserve their self interest at the expense of the nation. This is why it is important we have independent institutions such as the Judiciary to balance the abuse of power.

CA PRADEEP AGARWAL

In Reply to Naresh Nayak 4 years ago

Only due to Judiciary we are able to see life in our country, but as per my knowledge goes no one was better ruler in India than ABV.

CA PRADEEP AGARWAL

4 years ago

It is really shameful that NON GOVERNANCE has occupied such a high stage--whereas today only it was said that (in an International report that)GOVERNANCE was required in India

REPLY

Naresh Nayak

In Reply to CA PRADEEP AGARWAL 4 years ago

Narendra Modi is our only chance left. He may want to break out of the BJP and start a US presidential style campaign himself. The BJP is also corrupt since they have tasted power. Before that they were considered rulers. ABV has had his shortfalls. Today an ABV would be considered a toothless PM. We need a hands on PM like Narendra Modi.

CA PRADEEP AGARWAL

In Reply to Naresh Nayak 4 years ago

I 100% agree, not only as PM, but the same person in PRESIDENTIAL form if possible but our rules and regulations plus our CONSTITUTION.

sohan modak

4 years ago

I think that it is shameful that government has cheated by way of privatising UID data without prior information and consent of the people. This is and insult to the constitutional guaranteee of personal freedom and the government should be taken to the court through a massive PIL.

REPLY

CA PRADEEP AGARWAL

In Reply to sohan modak 4 years ago

My Dear Sir, who are people in their eyes they are simply insects. When did not pass Jan Lok Pal Bill inspite of such protests, whom do you think they will hear---only and only STRONG NON CORRUPTIBLE media can bring them to their knees.

rollitup

4 years ago

As soon as this project is complete, they'd soon bring a law like CISPA in place, so that data sharing amongst departments does not require court permissions. We're just imitating the west.

REPLY

CA PRADEEP AGARWAL

In Reply to rollitup 4 years ago

No doubt they will try to bring the law but at present does not seem practicable because if CONGRESS does not come to power it might be the end of UID................?

CA PRADEEP AGARWAL

4 years ago

MLF should keep up with the good work they are doing? Congrats to the team and especially Mr Basu, Ms Dalal.

CA PRADEEP AGARWAL

4 years ago

MLF should keep up with the good work they are doing? Congrats to the team and especially Mr Basu, Ms Dalal.

suresh dash

4 years ago

very useful and good news we are getting.thanks

Chitra Raman

4 years ago

Usha, if I had to characterize your writing in one word, it would be "Integrity." I admire your clarity of perception as well as your unflinching gaze. It is ironic indeed that those intent upon harvesting and stockpiling personal data on millions of Indians should hold themselves so supremely above all accountability to those very millions! In fact, that gives me an idea -- why not start a Unique Determination of Accountability Initiative of India (UDAII ) spearheaded by citizen's groups and directed at the leadership -- affectionately code named "KHABARDAAR" ??? best, Chitra

Raj

4 years ago

Would Moneylife & Sucheta Dalal send a public invite to Nandan and ask him to clear all our misgivings about Aadhaar. If he refuses to participate then he will be confirming our worst fears.

REPLY

Sucheta Dalal

In Reply to Raj 4 years ago


Well, when he no longer replies to emails (which he did earlier), what is the chance he would come to a public meeting?

Forget about us, even very senior technology gurus, who knew Nandan Nilekani who have served on top technology committees with him get vague replies, that too occasionally.

CA PRADEEP AGARWAL

In Reply to Sucheta Dalal 4 years ago

I HAVE HEARD THAT THERE IS UNOFFICIAL HO at Infosys Bangalore. Is it right.

Avinash Murkute

In Reply to Sucheta Dalal 4 years ago

Even the emails sent at official UIDAI are not replied. This is the peculiar characteristics of so called transparency. By now we should understand that the word Transparency was USP for selling some one's business in seminars and next day Fragile Publicity.

MSH

In Reply to Sucheta Dalal 4 years ago

Absolutely right, Forget technology heads or gurus,when the PSC itself has said that the project has to go back to drawing boards, it is an indication that there is something critically wrong with the project.. Unfortunately like all the unfolding other things with this government, UIDAI also does not seem to respect the parliament and seem to draw its power from some other sources :)

Udit C

4 years ago

I don't know if we the people are unique in our ignorance or if the administration that allows functioning of a non-valiodated body is unique in allowing such sensitive data to be collected and managed by private/autonomous NIUs.

But certainly the Authority is as unique in its own identity as are so many of us in allowing all this tamasha at our cost!

pravsemilo

4 years ago

The so called "open architecture" is a mockery. It is infact a walled garden (http://en.wikipedia.org/wiki/Walled_gard..., just like the iOS.

Just like we have apps for iOS our tech czar is trying to emulate the same.

The similarity to iOS should have been evident from the hackathon conducted by the Planning Commission recently.

REPLY

pravsemilo

In Reply to pravsemilo 4 years ago

The link seems to be broken due to the "...".

Here is the complete link.

http://en.wikipedia.org/wiki/Walled_gard...

jtd

4 years ago

Hope the fanbois of the UIDAI are able to digest how the whole country is being taken for a jolly ride.

Mathew Thomas

4 years ago

Congratulations to Usha for bringing out ant important aspect of the whole obnoxious UID scheme. Sorry, the word should be 'scam' not 'scheme'.

Truth about Mutual Funds – II: Avoid these common mistakes to really benefit from mutual funds

This is the second of a two-part series on essential facts about mutual funds. The first part explained 15 reasons why mutual funds are good for you


Investing in mutual funds is simple.  But, you must have discipline and patience. It is all about commonsense. You just have to hold your mutual funds for long periods. Mutual funds are excellent vehicles for accumulating wealth. They have great potential for creating lasting wealth in the long-term. Yet, people make mistakes in buying and selling them. Remember, most of the times, you lose patience first, before you lose money. But, these mistakes are very much avoidable. Let us see what these mistakes are and how to avoid them. And how you can make mutual funds worth your while!

 

Buying High and Selling Low.  People have let themselves down frequently by buying high and selling low. Past data shows almost 80% of the mutual funds investments happen after the market has run up and equities are no longer cheap. It leads to disappointment, because, the market either goes down or remains sideways for long periods. Then people get tired of waiting and sell their mutual funds, even at a loss. You can avoid “buying high and selling low” by taking these three simple steps:

  1. By not concentrating all or bulk of your buying in the upper ranges of a bull market,
  2. By holding your mutual funds for long periods through all the ups and downs, and
  3. By refusing to sell your well-chosen mutual funds when the prices are down.

Don’t Chase Top Performing Funds.  It is normal to crave for funds with the best recent performance. You want the fund with the best performance in your portfolio because at the moment of the decision it makes you look good and moreover you are averse to the risk of looking bad in your own eyes and in the eyes of your dear ones. But you must avoid this most common mistake of investing in a fund that has been going up fast, on the assumption that it will keep going up because, past performance is a poor predictor of future returns. Remember, when it comes to top performing schemes, this year’s hero is usually next year’s zero.

 

Don’t Rush To Sell The Fund That Hurts To Own.  Don’t be anxious to get rid of a mutual fund that is most painful to own. Most funds performance falters because the stocks they own go temporarily out of favour. Remember, it is most likely to be a future bargain. By selling your fund when it is out of favour, you not only lock-in a loss but also lock yourself out of the inevitable recovery, which could be lurking just around the corner. If you are not prepared to stick with a fund through three lean years, then you should not buy it in the first place.
 

Don’t Lose Patience.  As a mutual funds investor, you must demonstrate an unusual degree of patience. Remember, patience is your single most powerful ally.  You should be willing to wait considerably longer than the typical average individual investor to get a reward. It is extremely rewarding to hold your mutual funds for long periods, say about 10 years or more. The longer the holding period, the greater is the probability that you would gain more per year. Accumulation of wealth is guaranteed when you allow returns to compound over long periods.  The importance of patience in investing can never be over emphasized.  Benjamin Franklin famously said, “He that can have patience can have what he will”.  And even the famous stock market speculator, Jesse Livermore had this to say, “Throughout all my years of investing I have found that big money was never made in the buying or the selling. The big money was always made in the waiting.”

 

Read Part I: Truth about Mutual Funds – I: Fifteen reasons why mutual funds are good for you

User

COMMENTS

Nilesh KAMERKAR

4 years ago

There is no dearth of mutual funds schemes whose NAVs have gone up from Rs.10 to upwards of Rs.100. (in a span of about 17 years or less ).

It works out to a fantastic CAGR of 15% - 18% or more. And that too over a long period of say 15 years. ( of which the past 5 years have been the most difficult for equities)

Please find out for yourself about these WEALTH CREATORS.

M R Prabhakar

4 years ago

I recommend MF investors to read the book 'surviving the coming mutual Fund crisis by Donald Christensen; Pub Little,Brown and co. two quotes from the book:
Wealthy people such as EdJhonson of Fidelity and Templeton of Templeton MF did not accumulate bulk of their wealth by playing in speculative markets.Instead they made their wealth by plying on the dreams of peopl ......and collecting feesfrom them.
Mike Milken did not become rich by buying junk bonds and collecting interest, He got rich by selling the junk bonds.
2 You can as well give money to your brother in law for investing rather than to a fund manager who gives to his brother in law as you can at least fallback on your sister

REPLY

Suiketu Shah

In Reply to M R Prabhakar 4 years ago

Absolutely right Mr Prabhakar.MF work on investments for very very long periods like 17 yrs etc which is unworkable.

In 3 yr period in the right share like MRF tyres I could earn more than 20%.Why shd I wait 17 yrs?

arvindkumar baid

In Reply to Suiketu Shah 4 years ago

Sir,
I think direct shares investing is definitely more profitable than mutual funds but that also entails great risk than mutual fund. For example if a person had invested in RIL in March 2008 he would have been in loss but if he would have invested in a good MF he would not lost his capital as on date. Similarly a person investing in symphony would have earned whopping returns during the same period. A don't think direct investing is suitable to all. It requires a good amount of capital to start, good research and constant watch. Do you think a person who wants to enter the market for the long term but does not have big capital should leave it. I think he should rather start initially with MF and gradually after having a sizeable capital he can think of direct investing in shares

Suiketu Shah

In Reply to arvindkumar baid 4 years ago

Arvindkumar

We agree to disagree.Yr examples are not relevant as there are thousands of examples which can be given to prove my point as well.

I would request some people of a certain bank to stop stalking me on moneylife.in for their own good.

Nilesh KAMERKAR

In Reply to Suiketu Shah 4 years ago

Dear Sir,

Congratulations! Super returns.

But, an average investor does not possess such exemplary stock picking skills.

jaykayess

In Reply to M R Prabhakar 4 years ago

Well said, Mr Prabhakar!

jaideep shirali

4 years ago

Mutual fund investors need to firstly get the "mutual funds = shares = risk" idea out of their heads.70% of MF investments are in debt schemes, only 27% in equity and balanced schemes, (where atleast 60% are invested in shares). Secondly,considering stock market ups & downs, one should follow a monthly instalment route (SIP) rather than time the market. Thirdly, MFs allow you to invest across different time periods, starting from 1 day. Lastly, find a good advisor, pay him for advice and see the results. Free advice is rarely good advice.

jaideep shirali

4 years ago

Mutual fund investors need to firstly get the "mutual funds = shares = risk" idea out of their heads.70% of MF investments are in debt schemes, only 27% in equity and balanced schemes, (where atleast 60% are invested in shares). Secondly,considering stock market ups & downs, one should follow a monthly instalment route (SIP) rather than time the market. Thirdly, MFs allow you to invest across different time periods, starting from 1 day. Lastly, find a good advisor, pay him for advice and see the results. Free advice is rarely good advice.

REPLY

Suiketu Shah

In Reply to jaideep shirali 4 years ago

"Good advisor" for MF is moneylife.One doesnot need any other advisors once one has ml.You are under the wrong notion that paid advice is good.Wealth management companies are the biggest frauds and they charge for MF advice.

jaykayess

In Reply to Suiketu Shah 4 years ago

I fully agree with Suiketu Shah. Just because you pay for advice, doesn't mean it's good!!

Suiketu Shah

In Reply to jaykayess 4 years ago

Hello Jakkayess ,great minds think alike:)
The best advice is from moneylife.(and important to filter out all other advise direct,indirect or otherwise so it doesnot confuse you)

Have a great week ahead.

jaykayess

4 years ago

Nothing magical in this article. "Don't buy high and don't sell low" - isn't that kind of obvious? And it applies to equity stocks too.

But if Mr Kamerkar can tell us a way to determine what and when is the high and low price, now that would be truly magical... and both Mr Kamerkar and I would be able to retire rich.

Any tips for that, sirji??????

REPLY

Nilesh KAMERKAR

In Reply to jaykayess 4 years ago

There are more ways than one to figure out when equities are selling at a high - Recommend you to read 'The Intelligent Investor' by Benjamin Graham.

Rest assured, you will never ever have to worry about retiring rich ... and that too without having to do anything magical.












Suiketu Shah

4 years ago

Great article Mr Kamerkar.However it is true in view of mass mis-selling by agents in equities in India,if moneylife would not be there I would be far far from the equities world(and rightly so).

R Balakrishnan

4 years ago

Good points. Maybe it would be a good thing to have a third part about some common pitfalls and myths like "par" NAV, NFOs, sectors, etc.
Cheers.

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