India has resources; deregulation can help reduce dependence on imports of oil, gas, gold
Most of the advanced countries have become prosperous by developing natural resources, including oil and gas. In India, the system has to stop creating hurdles. Instead of notices and judicial activity, all businesses need to receive recognition and respect.
By Anil Agarwal
It is painful to see India face the adverse consequences of a war we have nothing to do with, particularly because of raw material security. We don’t have to import 90% of our oil, or 95% of our copper or 99.5% of our gold or any other metal resources. Mother Earth has given us the best geology. Last 40 years of practice in the minerals, metals and oil industry have taught me this. Now is the time, with this positive government, to give entrepreneurs freedom.
At just 19, I came to Bombay from Bihar and built a company in this industry from scratch. Vedanta was able to acquire Hindustan Zinc and BALCO under a privatisation programme which was never completed. 26% and 49% stakes are still held by the government and not been transferred as per a predetermined agreement. Vedanta also acquired ONGC Oil and Gas asset via UK’s Cairn and Sesa Goa Iron ore from Japan’s Mitsu.
In each one, the ambition and goal was to increase the production so much that India wouldn’t need to import but, in fact export. In Hindustan Zinc and BALCO, we succeeded. We increased zinc production 10 times, 20 times in aluminium. In the process, more than 1,000 companies have come up for processing this raw material. And Vedanta has contributed Rs 4.5 lakh crore to the exchequer in the last ten years. In oil and gas, our vision is to produce 1 million barrels per day. In iron ore, my vision is to produce 100 million tonnes, 33% of today’s production level. There are many more underperforming government assets that can perform the same way.
Three or four decades ago, there was no know-how, no experts, no finance in this industry. It took a lot of determination. Vedanta raised 35 billion USD from abroad and invested in India. It brought experts and technology. Because of that, Hindustan Zinc can also produce silver and fertiliser, and we are working very hard to start producing critical minerals very soon, something we were told would never happen in India.
Globally, only few very large companies engage in mining as it is very difficult without scale. Vedanta should be for India what Rio Tinto and BHP are for Australia or Vale is for Brazil. Other entrepreneurs and companies must create new Vedantas.
Most of the advanced countries have become prosperous by developing natural resources, including oil and gas. In India, the system has to stop creating hurdles. It needs to take a long-term view, as this government is not revenue-minded but, production-minded. It must facilitate. Instead of notices and judicial activity, all businesses need to receive recognition and respect. Benefit of doubt should pass onto them.
In India, we have economic heroes who can raise production equal to the biggest and best in the world. We should not allow tunnel vision or outdated mindset to keep us small and dependent. Some may remember the case of Rio Tinto which had invested in a diamond mine in Madhya Pradesh. It could have made India a global hub for diamond production, but they exited because of a complex, interfering and discouraging system.
The most important thing is trust. Keep the system simple, keep regulation limited and you eliminate the root cause of wrongdoing. We should have self-certification instead of lengthy approvals and clearances. The Government issues the rulebook and entrepreneurs strictly comply, subject to audit. Constant enquiry and interference only discourage enterprise. Also, the mindset of discrimination between public sector and private sector should change.
This year my family had the biggest tragedy. It was heartening to hear the words of the Prime Minister who said, “You must stay strong and continue to do work which is important for India.” That is the motivation of my life. I have the blessings of my grandfather and grandmother, who spent 40 years in Vrindavan in a small hut, in Manav Seva Sangh with their guruji, Swami Sharnanand Ji Maharaj. They always advised me, if you have wealth, you must use it for society. If you don’t have wealth, you must always help society with your hand. We all are willing to work hard, take risks and ensure that India becomes self-sufficient. The system should encourage us to deliver for our society and nation; this will eradicate unemployment and encourage women empowerment. This sector has given the maximum revenue to the exchequer in India and in the world for nation-building. It will help in making our country a developed nation, as envisioned by our Prime Minister. Let’s make India & Indians proud.
(Source: X @AnilAgarwal_Ved. Author is Chairman, Vedanta Group)
