Another roller coaster ride for rural economy

Margao: Dhiraj Naik, 40, from Dhadem, Sanvordem, is a depressed man. Heavily into debt, Naik hoped to recover his finances following the renewal of mining leases in the state after a four-year-long hiatus. Two years ago, two of his trucks were engaged in mining transportation at Sesa Goa’s Codli mines.
However, news about the impending March 15 shutdown of mines has caused Naik’s heart to sink.

Ten years ago, Naik, a poor farmer’s son, ventured into mining transportation not knowing that the trade he was engaged in was illegal, as the Shah commission report later revealed. His business flourished and he soon came to own a fleet of vehicles and a hefty bank balance to boot. However, the mining ban of September 2012 brought his world crashing down.

Out of business, he soon found himself bankrupt. He sold all his vehicles to avail of the state government’s one-time settlement scheme, and borrowed heavily from banks and relatives to finance the marriage of his two daughters.

“I can literally feel the ground sinking beneath my feet,” Naik told TOI, staring blankly into the future.

Naik is among the thousands of people from the state’s mining belt who have been victims of the dramatic changes the rural economy has been witnessing for the last over half a decade or so. With the impending closure of 88 mining leases, the rural economy is once again headed for a nosedive.

Prior to the Supreme Court-imposed ban in September 2012 following the Shah Commission report on illegal mining, the rural economy of the mining belts was growing at a breakneck pace.

But when the crisis hit, the economy slumped as the purchasing power of the mining dependents witnessed a sharp downward spiral.

While trade recorded low volume transactions and thus low profits, the real estate industry also hit a low.

While they hoped that the revival of the mining industry following the second renewal of the 88 mining leases over the last two years had put the economy back on the upward trajectory, the February 6 order of the apex court holding the second renewal of the leases as illegal has crashed all hopes of a revival. The rural economy is now poised for yet another slide.

Consider this situation in the mining belt prior to the 2012 ban: While thousands of locals were dependent on mining for their daily bread as truck owners/drivers, automobile/machine spare part dealers, tyre retreaders/dealers, truck body fabricators, welders, etc, the migrant population also shared a significant pie of the booming business. The migrant population in this mining belt had increased many times over during the last decade, corresponding to the rise in exports of the mineral ore. Locals’ increased purchasing power had ensured that the local market economy was prospering — the rise in the number of business establishments, retail outlets, including garment shops, consumer durables showrooms, hotels, restaurants and even the ever-mushrooming bars and taverns in a small town like Curchorem was a pointer to just that.

The booming economy, driven largely by mining, gave rise to a burgeoning new class of mining dependents in addition to the allied trades that thrived primarily owing to mining. While locals invested in trucks and mining vehicles, they employed young men from states like Jharkhand, Orissa and Chattisgarh to work as drivers, mechanics, welders, etc. What’s more, the large scale illegal mining trade led many enterprising local youth to become transport contractors by investing heavily in machinery and merchandise.

The 2012 mining ban greatly affected the fortunes of all these categories of mining dependents, with the economy witnessing a downturn that lasted for nearly over four years.

Financial experts fear that the impending mines shutdown will once again affect the economy of the mining belt, and that the state can ill-afford to rely on the quicksand economy of mining any longer.

“The rural economy of the mining belt of Goa is fraught with worrying vulnerabilities. Economy will eventually stabilise, which we witnessed over the last few years after the 2012 mining ban, as it is after all a demand-supply equation. However, it’s time the mining dependents prepare themselves for a phasing out of the mines over the next few years. One cannot perennially remain mining-dependent. The government should come out with a white paper on the status of the mining industry and its prognosis. The government should also help provide better livelihood alternatives for mining dependents,” chartered accountant and social activist, Pradip Kakodkar, told TOI.

(Some names have been changed to protect identity)