Mains Focus – 3rd March 2026

Question

Despite India being one of the countries of the Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss…. [UPSC – 2021, GS -1]

Answer

India, geologically a part of the ancient Gondwanaland, possesses vast reserves of coal, iron ore, manganese, bauxite and mica. The Geological Survey of India estimates substantial mineral resources across the Peninsular Plateau, especially in Jharkhand, Odisha and Chhattisgarh. Yet, mining contributes only around 2–3% to India’s GDP, which is relatively low compared to resource-rich economies.

Reasons for Low Contribution

1. Limited Diversification of Minerals

• India is rich in bulk minerals (coal, iron ore) but deficient in strategic minerals like lithium, cobalt, and nickel.

• High-value metals and rare earth elements are underexplored.

2. Regulatory and Policy Bottlenecks

• Complex clearances under environmental and forest laws delay projects.

• Although reforms like the Mines and Minerals (Development and Regulation) Act, 1957 amendment and commercial coal mining have been introduced, implementation gaps remain.

3. Technological and Productivity Constraints

• Predominance of small and unscientific mining operations.

• Low mechanization compared to countries like Australia.

4. Infrastructure Deficiencies

• Poor rail and port connectivity in mineral-rich eastern India raises logistics cost.

• Evacuation bottlenecks reduce export competitiveness.

5. Socio-environmental Concerns

• Mining regions overlap with tribal areas leading to land acquisition conflicts.

• Strict environmental scrutiny and rehabilitation costs limit expansion.

6. Structural Nature of Indian Economy

• India’s GDP is service-driven (IT, finance, telecom).

• Even if mining output rises, its share remains small relative to the fast-growing tertiary sector.

Way Forward

• Focus on exploration through private participation and advanced geospatial technology.

• Secure critical minerals under initiatives like Khanij Bidesh India Limited.

• Promote value addition and mineral-based industries.

• Ensure sustainable and community-inclusive mining practices.
  

Thus, despite Gondwanaland heritage, structural, policy, and economic factors explain mining’s modest GDP share. Strategic reforms and technological modernization can enhance its contribution while ensuring environmental sustainability.

Download as PDF