The Union Ministry of Mines has requested an expert advisory committee of the Environment Ministry to exempt it from the Supreme Court-mandated fees that prospectors pay when they dig exploratory boreholes in forests, records of a meeting show.
The Net Present Value (NPV), as it is called, is a monetary approximation of the value that is lost when a piece of forest land has been razed. This is on the basis of the services and ecological value and there are prescribed formulae for calculating this amount which depends on the location and nature of the forest and the type of industrial enterprise that will replace a particular parcel of forest. The Supreme Court mandates this must be paid by those who use forest land for non-forestry purposes and only limited exemptions are permitted.
On August 18, officials from the Ministry of Mines requested that ‘prospecting and exploring’ in forests be exempted from ‘the purview of the Forest Conservation Act.’ They argued that “... all areas of exploration are not converted into mining. Only about 1% cases are converted to mining. Considering these, payment of NPV is regarded as an avoidable expenditure. It was submitted that even payment of NPV at a rate of 2% or 5% is one of the major challenges which leads to delay in the exploration/ prospecting activities.”
The Secretary of the Environment Ministry refused saying that it would be ‘inappropriate’ for his Ministry to grant such an exemption as this was mandated by the Supreme Court.
On borehole basis
The Forest Advisory Committee, the Environment Ministry constituted expert committee that decides on whether forests can be diverted for projects, said that while it was not possible to do away with NPV it recommended that the Environment Ministry “may consider charging NPV on borehole basis instead of the present practice of charging 2 or 5% NPV of the total forest area in the lease area.” For prospecting on a site, large boreholes are dug to determine the existence, location and quantity of metal. In 2018, the Coal Ministry, the Mines Ministry and the Ministry of Petroleum and Natural Gas had sought to be exempted from forest clearances for digging exploratory boreholes. The FAC refused but agreed to simplify the procedure.
The NPV came into being after a committee led by Professor Kanchan Gupta, of the Institute of Economic Growth, developed it based on a mandate from the Supreme Court.