Image Credit: Curt Carnemark

As a trusted government resource, the Centre for Policy Research (CPR) is helping India develop more transparent processes for allocating its natural resources.

SETTING THE SCENE —India possesses valuable natural resources, including coal, minerals, natural gas and arable land. How these natural resources are allocated is a politically contentious issue long plagued by scandal and corruption. Opaque processes favour powerful political and business interests, who often claim exclusive access to the resources. As a result, rural communities, whose economies depend on the surrounding natural resources, have little control over them and, therefore, receive little benefit from them. In addition, resource monopolies allow rights holders to control prices and supply, increasing their share of the wealth rather than increasing the value of the resource to the Indian economy.

As part of the government’s broader efforts to address corruption, in January 2011, it constituted an Expert Committee to recommend ways to enhance transparency, effectiveness and sustainability in using the country’s natural resources. The high-level committee focused on those natural resources that are under the direct control of the central government, including land, water, minerals and radio frequency (spectrum). Its mandate was to identify key natural resources being allocated by the government; to assess the legal and regulatory framework used in the process; to recommend ways to enhance sustainability, transparency and efficiency; and to suggest changes in the legal, institutional and regulatory framework to implement these recommendations.

WHAT CPR DID —The committee asked the Centre for Policy Research (CPR) for assistance in undertaking its work. CPR already had a strong track record for its research on issues related to natural resources use, and combined this with broad knowledge of law, institutions, and economics. Through previous work in the infrastructure sector, CPR had also developed good connections with officials central to the process.

CPR supported the committee throughout its four months of deliberations. The Centre prepared background research and analysis, co-ordinated the committee’s discussions, facilitated extensive stakeholder consultations, proposed recommendations and helped prepare the final report. It also articulated a conceptual framework that enabled thinking about the many variables and trade-offs involved in allocating natural resources, and the legal and institutional requirements to make it more transparent.

THE OUTCOME —The committee made 81 specific policy recommendations for sectors including coal, mineral, petroleum and natural gas, spectrum, forest, land and water. The Group of Ministers tasked with reviewing the report accepted 69 of those recommendations. The remainder, which pertained largely to coal and natural gas, were deferred for further consideration.

The conceptual framework put forward in the report is innovative in the complexity of factors it considers, providing a more sophisticated tool for policy-makers. Just getting all 11 ministries involved in the process to sign on to the framework was unprecedented. Although the report has not yet been released to the public, the very process of deliberations and subsequent discussions within government appears to have moved natural resource allocation in a significantly more transparent, effective and sustainable direction. Some of the committee’s recommendations on minerals have also been reflected in new legislation on the development and regulation of mines and minerals proposed by the government.

For more information on the Centre for Policy Research visit http://www.cprindia.org

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