The blanket ban on rampant illegal mining in Uttar Pradesh, especially after Yogi Adityanath's government came to power on March 19, has hit the state's realty estate sector hard due to the acute shortage of building material, such as sand, maurang, and gravel, among others.
The short supply of the construction material has had a cascading effect on the cement trade as well, since both organised and unorganised construction activity has seen a climb down.
So much so, that the UP Cement Dealers Association (UPCDA) has now warned it will stage demonstrations at the district headquarters next week if the supply of maurang is not regularised within a week. Nikhilesh Dubey, president of the Kanpur-based industry body, claimed cement traders had been booking huge losses with the construction activity coming to a virtual halt in the state.
“All the cement traders would also hand over the keys of their shops and establishments to the district authorities,” Dubey told Business Standard.
The illegal mining activity had come under the state scanner after the Allahabad High Court order and the authorities started to get tough and taking action after election dates were announced for the 2017 UP poll and model code of conduct was enforced.
The HC had banned mining of sand and maurang from river beds in the state to curb illegal mining, which had been going on rampantly for the past several years. The HC order had also banned transport of such mineral from other states.
Subsequently, the situation of the availability of maurang started to deteriorate over the last two months and owing to supply squeeze the prices of maurang has now shot up from Rs 20 per cubic foot (cu ft) to Rs 120 cu ft in the state, thereby implying six-fold increase.
A local builder said a typical middle class house requires at least three truckloads of maurang, which cost nearly Rs 25,000 per truckload earlier. “Now, this cost has escalated to over Rs 1,25,000 per truckload of maurang, adding to the cost of construction. This has caused people to defer their construction decision,” he lamented.
In its first cabinet meeting on April 5, the Yogi government had constituted a Group of Ministers (GoM) chaired by deputy CM Keshav Prasad Maurya to suggest ways to deal with flagrant illegal mining. The GoM, which also constituted cabinet ministers Suresh Khanna and Dara Singh, was given a week’s time to submit its report.
Following the submission of report by the GoM, the state cabinet meeting on April 11 had given its nod to a short-term mining policy to meet the emergent scarcity of construction material.
Under the new policy, the Yogi government would grant mining leases through e-tender route. The mining leases have been limited to 10 acres and for a period of six months. Additionally, valid transport permits issued in other states have been allowed to transport minerals pertaining to the construction industry.
This is a short-term policy and the government would formulate a long-term policy based on the recommendations of the GoM.