By Vishal Sinha
Sand mining in India had long remained an unregulated sector. No standards, taxes or permits were established or enforced by the Government. This lack of regulation went a long way in complementing the indiscriminate sand mining undertaken by companies and corporations. As things stand, regulation attempts are still insufficient at fixing these problems.
Attempts at regulation
Widespread calls for regulation by environmentalists and policy analysts led to government-initiated regulatory mechanisms. Despite this, illegal sand mining in India is reported to be worth billions of rupees. It also has political overtones; the illegal sand mining sector yields more than Rs 15,000 crore a year in illicit income to the mafia and politicians.
In 2015, the Modi Government took steps to lay down regulatory mechanisms to reduce indiscriminate sand mining. The policy thus adopted incorporated economic incentives like permits into the regulatory framework. The state governments now allow corporations to mine sand only after buying permits from the regulator. Such permits allow for a fixed quantity of sand to be mined and carried out of riverine systems. This was followed by a National Green Tribunal order banning sand mining from river beds without prior environmental clearance.
Failures of the permit system
The permit system has not been enough to deter exploitation. Companies dont respect the system and mine quantities of sand beyond the prescribed limit. Implementation of economic incentives and similar regulatory mechanisms in India is a problematic situation. It is estimated that as much as 70 percent of sand miners have no permits.
Public enforcement of current mechanisms is hindered by malicious and corrupt practices of the regulators. The permit system, complemented with a credible market to transact such permits, should ideally be efficient in limiting illegal mining. Yet, in the face of dismal enforcement by the government, the permit system has contributed negligibly in reducing illegal sand mining. There have been several judicial proceedings where courts have noted that the government must wake up to the necessity of change.
Recommendations for policy change
In light of such difficulties, several initiatives need to be undertaken to regulate sand mining:
- Environmental Impact Assessments (EIAs): Sand extraction from river channels and overbank areas causes local disruptions. These could be anticipated and prevented through appropriate EIAs.
- Adaptive Nature of the Price of Permits: The price of the permits needs to be continuously evaluated. Rigidity in the price without factoring in actual resource consumption does not incentivize miners to respect regulatory mechanisms.
- Alternatives to sands: Many policy scientists have suggested tapping alternative sources of sand and gravel like sand that accumulates at the bottom of dams. The same was acknowledged in the 2016 sustainable sand mining management guidelines released by the Ministry of Environment, Forest and Climate Change. They noted that because sand is still very cheap sand itself is freely accessible and only extraction and transportation costs need to be covered there is little incentive to induce a change in our consumption. This can be remedied by increasing prices of sand permits and reducing prices of substitutes of sand like quarry.
- A market for permits: The permit system still incorporates sufficient characteristics of the Command and Control Model, as permits have no transferability. Establishing a mechanism for such transfers would allow corporations to mine more sand when required, but only after incurring greater costs.
- Technological developments: The ministry and the regulators should implement technology like satellite imagery and drones to monitor the amount of sand mined.
- Private enforcement: Lack of transparency in the wealth of the regulators, raids conducted in various sand mafias/politicians houses and the lackadaisical enforcement of anti-corruption regulation are major loopholes in the enforcement of the permit system. Such deficiencies point out that economic incentives systems are hard to implement in India as the necessary institutional support to effectuate such system are not present. This has been curtailed by the use of private enforcement mechanisms, like class action suits.
- Privatisation: Letting private firms contract with the government would ensure enforcement of the permit system on the governments behalf.
The adoption of an economic incentives system to deal with the problem of illegal sand mining is commendable. However, the failure of this as a system highlights the fact that India lacks sufficient institutional framework to implement it. Until the problems of corruption and lack of transparency are fixed, public enforcement will remain dismal.
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