CHAPTER – V PROSPECTS OF GRANITE INDUSTRY IN ANDHRA PRADESH 5.1 Indian Scenario Granite is known as “King of Stones” because of its inherent characteristics such as extra fine mirror polish, scratch free glossy surface and durability. Indian granite has become the most sought after and extensively used stone material in building constructions and massive structural works throughout the world and is well known in the international market not only for its elegance and aesthetic quality but also for its durability.

India accounts for 30 per cent of the world‟s export of high quality natural stones like granite, marble, sandstone. The country has emerged as one of the teaching countries in the production and export of granite and other stones. The country has vast resources of granite with about 1120 varieties of different colours and textures. The industry is producing a wide range of granite based products, viz. Granite tiles, slabs/blocks, monuments, tombstones, table tops and several handicraft items like costume jewellery boxes, ashtrays, pen stands, paper weights etc.

Ever since the Government of India pronounced Granite as a Trust Sector in 1990, the granite industry has taken a new turn. Today granite has emerged as a major foreign exchange earner. India‟s export of granite and granite based products witnessed a phenomenal growth by reaching a level of Rs. 3, 490.58 crore in 2005 – 06 as against Rs. 2, 562.26 crore in 2004 – 05 thereby registering a growth of 36.23 per cent.

The granite industry in India is concentrated mainly in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Rajasthan. Realising huge potential of granite, many others states have set up granite units. These include: Orissa, Madhya Pradesh, Assam, Gujarat, Maharashtra and Bihar.

154

The Capexil set up by the Government of India under the aegis of Ministry of Commerce and Industry (formerly known as the Chemicals and Allied Products Export Promotion Council) over the years has been playing an important role in promoting exports of granite and granite based products. Besides, the Capexil as reported in The Hindu Business Line July 27, 2006 has submitted a proposal to the Ministry of Commerce and Industry, Government of India for creating a Mineral Upgradation Fund worth Rs. 5,000 crore. The fund if approved by the Ministry will be used to provide subsidies to modernize technology used in the extraction of natural stones such as granite, marble and sandstone etc. and upgrade stone products processing units.

India Granites and Stone Association (Bangalore) has also been playing an equally important role in promoting granite industry by organising international trade fairs on granite and other stones in India after every four years. These fairs have been widely participated by the leading exporters/importers and other concerned interests both from India and abroad. The interaction among the key players in such gatherings help the industry to generate export orders and also acquire the latest technical know-how about the developments in the granite industry in the world.

The Government of India‟s policy to accord status of 100% Export Oriented Units to granite industry has resulted in the formation of a large number of 100% EOUs for manufacturing granite-based products.

Over the recent years, demand for Indian granite both in the domestic and foreign markets has been continuously going up. Though India exports granite of varying colours, yet black granite popularly known as “Indian Black” is in great demand.

Government of India has realized the importance of granite as an item offering tremendous export potential. As a result, it has initiated several steps to promote exports of granite and granite based products. Some of the steps taken recently include: (i) Declaring granite as a thrust sector for promoting exports in a big way; 155

(ii) Constitution of a separate Panel “Granite, Stone Products Thereof” by the Capexil (formerly known as Chemicals and Allied Products Export Promotion Council, an export promotion body set up by the Ministry of Commerce and Industries, Government of India to boost exports of chemical and allied products; (iii) Inclusion of granite in the select list of items eligible for setting up units under 100% Export Oriented Units Scheme launched by the Govt. of India under the aegis of Ministry of Commerce and Industry; (iv) Inclusion of Granite in the ITPO (India Trade Promotion Organisation) range of products for export promotion; (v) Government policy for phasing out export of rough and crude granite thereby focusing on export of finished/polished granite in the form of slabs, tiles, handicraft Items; (vi) A new uniform policy on granite related with leasing and systematic exploitation of granite resources without affecting environment; (vii) Formulation of new set of rules, titled “Granite Conversation and Development Rules” by the Ministry of Mines, Government of India in consultation with leading granite producing states such as Andhra Pradesh, Karnataka, Tamil Nadu and Rajasthan; (viii) Setting up of a Granite Development Council under the aegis of the Ministry of Mines, the Government of India with due representation from various concerned government departments and other related organizations; (ix) Setting up of a separate Export Promotion Council for EOUs and SEZs under the aegis of Ministry of Commerce & Industry, Government of India with the main objective of giving a boost to the export of 100% Export Oriented Units.

One of the most distributing trends witnessed in the export of Indian granite in recent years related with China emerging as the major importer of Indian rough granite. In 1998 – 99, it imported the same to the tune of Rs. 38.2 crore which in the subsequent years continuously increased to Rs. 152.4 crore in 1999 – 2000, Rs. 189.2 crore in 2000 – 01, and Rs. 195.8 crore in 2001 – 02, Rs. 251 crore in 2002 – 03, Rs.5314 crore in 2004 – 05 and Rs. 606.2 crore in 2005 – 06. It has now become India‟s major competitor in the polished granite. As a result of this development, most of the granite processing units have become sick and plagued with gross under-utilisation of installed capacity as they are not getting required category of rough granite for 156

processing. This is indeed not a heavily sign and need attention of all the concerned interests i.e. trade and industry, state governments and the policy makers.

Another constraint which the granite industry today is facing relate to technological impediments. Only 20 percent of the total 10, 000 quarries both large and medium sized in India resort to mechanized extraction of stones. Technological constraints have severely impacted demand supply chain. Modern methods such as wire-saw cutting and jet piercing are not popular among quarry owners who still use the blast method. There is strong felt need to modernize and standardize extraction procedures. The blasting method used by quarry owners‟ result in hug scrap losses. This severely affects productivity. Granite industry is finding difficulty to meet big orders from Europe and America because of the non-availability of rough granite and marble blocks. The problem is further aggravated due to closure of several quarries in Karnataka, Maharashtra and Andhra Pradesh. Especially, the closure of quarries in Karnataka has resulted in severe shortage of premium granite varieties such as Red Multicolour. India Juprna, Black Galaxy, Absolutely Black, Madurai Gold and Kashmir White.

Dimensional Stones form a major component of Indian construction sector, which accounts for 5% of the GDP and is the second highest employer after agriculture. India and China are expected to experience highest growth in the construction industry. India‟s anticipated growth rate in construction is 10% by 2007. With the higher anticipated spending in the private construction (housing) in coming years due to increased financing options, tax benefits and favourable interest rates, the stone sector is bound to have a leap forward.

Dimensional Stones are the mainstay of the economy of Indian states like Andhra Pradesh, Tamil Nadu, Karnataka and Rajasthan. India is endowed with vast natural resources of granite in several states predominantly in Southern India, Uttar Pradesh, Rajasthan, Madhya Pradesh, Gujarat and Bihar.

157

Some of the colours and types of Indian granites are unique in the world and have no parallel and have regular demand in the world market. Indian Marbles and Sandstones have their own pride of place and one can see these stones in exotic beauty at Taj Mahal in Agra, Ranakpur, Delwara Temple, Abu, Red Fort and many other historical monuments. Similarly, in many War Memorials and several other memorials in U.S.A., several buildings of large corporate giants in Japan, China, South Korea and Europe. So is the case in Gulf countries, where Indian Natural Stones are preferred and used extensively.

India is one of the largest producers of dimensional stones in the world. India is endowed with vast resources of granite, marble, sandstone, flaggy limestone (kotastone), slate and quartzite. Some of the colours and types of Indian granites are unique in the world and have no parallel and have regular flow of demand in the world market. o Indian Stone Industry accounts for 

A sales turnover of over Rs. 15, 000 crores.



Exporters over Rs. 3,400 crores (2003 – 04) and provisional exports of Rs. 3,500 crores (2005 – 06)



Employs over 1.5 million workforce

o The rural economy of many developing states like M.P, U.P, Orissa and the North eastern states is dependent on this industry. o Plays a vital role in the economy of states like Tamil Nadu, Andhra Pradesh, Karnataka and Rajasthan.

158

5.2 Production and Exports Table – 5.1 INDIAN STONE PRODUCTION (in Thousand Tons) 1998 - 99

1999 - 00

2000 – 01

2001

– 2002 -03

2003 - 04

2004 - 05

2005 – 06

02 Marble

3761

4754

6831

6318

7511

8469

9608

12000

Granite

5000

5300

5900

6205

6710

7059

7759

9000

Sandstone

6310

9297

6659

6861

6363

8153

9313

11000

Flaggy

1428

1619

2096

2164

3387

3757

4268

4850

Slate

7

12

16

18

14

11

110

150

Total

16506

20982

21502

21566

23986

27449

31059

37000

Limestone

Source: CAPEXIL

India is a leading exporter of stones and ranks third (in terms of tonnage) after Italy and China, with Spain as a close competitor on 4th rank. India‟s position in the global export trade (in terms of tonnage) is: 

3rd in world stone exports with a share around 10% in the global market.



1st in Raw Siliceous product (Granite & Sandstone) exports. India is a global leader in terms of granite exports and has consistently maintained its position.



5th in Raw Calcareous product (Marble, flaggy limestone) exports.

Indian Stone Exports comprise mainly Granite Cut Blocks, Granite Slabs and Tiles. The share of marble, slate and sandstone are steadily increasing for the past few years. The major importers of Indian stones are USA, Italy, Taiwan, Japan, Germany and China.

Indian Stone exports were approximately Rs. 3, 408 crores during 2003 – 04, with Granite alone accounting for Rs. 2653 crores.

159

Table – 5.2 INDIAN STONE EXPORTS (Million Rupees) 1998 - 99

1999 – 00

2000 – 01

2001 - 02

2002 - 03

2003 – 04

16712

19540

20463

24606

26538

1580

2362

2085

2292

1993

867

1101

1436

934

1391

1460

Sandstones & other 911

1401

1530

2664

3502

4096

20794

24868

26146

31791

34087

Granite

and 10130

Products thereof Marble and Products 1111 thereof Slate

stone

products

thereof Total

13019

Source: CAPEXIL India has done well in exports of granites in the world market in last few years. However, severe competition is posed from countries like China, South Africa, Brazil, Zimbabwe, Spain and Italy.

Export figures of Indian granite are provided in Table – 5.3. Similarly, destinationwise exports from India are tabulated in Table – 5.4.

India is the Second largest exporter of granite after China. Next in line are Brazil and South Africa. With all the progress in granite processing industry (value added finished products), India is yet far behind i.e. at 5th place in the world (Table 5.5). Prior to 1987, the exports of Indian processed granite products was hardly 10% of the total granite exports, but in recent years, the share of value added finished products has touched 75 – 80% of the total granite exports. Thus, the trend has reversed favourably in favour of finished value added products.

160

India has abundant resources, technical know-how and large quarrying base and processing capacity and can safely ensure export growth @ 20% per annum during the 11th Plan period.

The exports and domestic production are complimentary and supplementary in every aspect and thus the domestic industry will also grow simultaneously with the development of exports. It is estimated that domestic industry shall grow @ 20% per year during the 11th Plan period.

161

5.3 Indian Stone Resources Granite The total estimated / projected resources of granite in India by Indian Bureau of Mines (including Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Orissa, Rajasthan, Tamil Nadu and West Bengal) are as follows: Proved

Probable

Possible

Total(in thousand tonnes)

11, 114

332, 457

683, 850

1, 027, 421

India‟s granite resources are very large which can last for hundreds of years and meet the demand for a long time. Marble Indian Bureau of Mines assessed marble resources in India in the year 2000. Subsequently, extensive deposits spread over 65 sq. Km. area were discovered in Madhya Pradesh and are now being actively exploited. A consolidated statement indicating resources / reserves established by GSI, IBM, State departments of Mines & Geology is indicated below:

State-wise Marble Resources

Total (In million tons)

Rajasthan

1144

Jammu & Kashmir

405

Madhya Pradesh (estimated)

400

Gujarat

95

Chhattisgarh

83

Maharashtra

59

Haryana

22

Uttaranchal

6

Sikkim

2

Total

2216

162

Sandstone Sandstone resources in India are spread over the states of Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Madhya Pradesh, Meghalaya, Mizoram, Karnataka, Orissa, Punjab, Rajasthan, Uttar Pradesh, Tamil Nadu and West Bengal. Over 90% of the deposits of sandstone are in Rajasthan, spread over the districts of Bharatpur, Dholpur, Kota, Jodhpur, Sawai-Madhopur, Bundi, Chittorgarh, Bikaner, Jhalawar, Pali and Jaisalmer. Flaggy Limestone „Kotastone‟ of Kota district and „Yellow Limestone‟ of Jaisalmer district of Rajasthan are the prime limestone occurrences. Other deposits are Shahbad Stone of Bijapur, Belgaum districts of Karnataka, „Cuddapah Stone‟ of Kurnool, Anantapur and Guntur districts of Andhra Pradesh, „Milliolitic Limestone‟ from Saurashtra Region, Gujarat, „Yellow Limestone‟ of Kuchch district of Gujarat, amongst others. Slate Slates resources are found in Rajasthan, Haryana, Himachal Pradesh, Andhra Pradesh and Madhya Pradesh. Deposits in Rajasthan are spread over the districts of Alwar, Ajmer, Bharatpur, Tonk, Sawai Madhopur, Pali, Udaipur, Churu & Chittorgarh.

5.4 Projections for domestic consumption and exports Indian stone is widely accepted world over and also in the domestic market. The demand is growing rapidly with the boom in the construction sector.

The demand for granite and other decorative stones is increasing and is anticipated that the annual growth would be around 20%. Indian granite, marble and other stones have established very well in world market where our share of world requirement is 12% of the total world market, which is Rs. 25,620 crores and 18% in terms of tonnage. India has abundant resources, sufficient technical know-how, large

163

quarrying and processing capacity, and can safely ensure export growth at the rate of 20% per year in coming 15 years or more.

Domestic consumption of Granite stones is around Rs. 7, 000 crores. It is anticipated that the dimension stone industry for the domestic sector will also grow simultaneously with the development of Export Industry. Our country in the last few years is having a phenomenal growth in building activities and other infrastructural areas where the demand has picked up. The growth is continuing in domestic granite consumption and shall remain growing in the coming next 15 years.

The projections for exports for next 15 years are provided in Table – 5.6. Similarly, projections for domestic demand for next 15 years are provided in Table – 5.7 considering growth rate of 20%. 5.5 Projections for investment in Dimensional stone Industry Present investment in dimensional & decorative stone industry in India is estimated at Rs. 10, 000 crores. It is expected that given the policy support, the total sales turnover of all the stones, which is today at around Rs. 15, 000 crores will increase to over Rs. 44,788 crores by 2012, Rs. 1, 11,444 crores by 2017 and Rs. 2, 77,304 crores by 2022 considering an estimated growth rate of 20%. In order to meet the projections in next 15 years, it is estimated that further investment have to go up by about Rs. 2, 00,000 crores (including foreign investment) by 2022. 5.6 Indian Stone Industry vis – a –vis Global Practices India is facing severe competition from important granite processors like China, Italy, Brazil, Taiwan, Greece, South Korea, East European countries etc. India is facing stiff competition in marketing of Indian marble and granite day by day.

On one hand, the Indian stone industry has to equip itself adequately to meet the growing competition and on the other hand, the policy environment governing the 164

Indian dimension stone industry needs to be made more conducive to facilitate the growth of the Industry, which is largely in unorganized sector and falling predominantly in Cottage/Small Scale Sector.

In the context of the Eleventh Plan, therefore, the corrective action shall have to be taken in respect of some bottlenecks in Indian dimensional stone industry vis – a – vis the international practices.

5.6.1 Mineral Royalty For Granite, there is no mineral royalty in China and there is negligible levy of royalty in Brazil. Important factor is that long term quarry leases of 30 to 99 years are given in these countries with fixed rate of royalties which are not variable, whereas in India, the states increases royalty every two to three years and increases are so steep that Indian exporter are unable to take up major projects on a long term basis. This creates problems for Indian exporters, as it is not able to match the prices internationally. In India, dimension stones are grouped as minor minerals and in the Federal structure, the State Governments are fully empowered to fix and revise the rates of royalty on dimension Stones which are only a meagre source of revenue for the states. In order to make Indian dimension stones competitive internationally and to achieve the rates of growth as envisaged in the Eleventh Plan, there is a case for bringing about some kind of reduction in the rates of royalty and ensuring uniformity of royalty in all the states and to consider providing long tenure of leases. 5.6.2 Financial Assistance The prevailing rates of interest in the competing countries range between 4 to 6 percent. Even though interest rates have been lowered now, however, the trend of increase is now continuing. There is strong need to provide long-term low interest finance to the industry. In India, the rates of interest are much higher and the dimension stone industry and financial institutions shy in financing projects. The interest rate in India should be made comparable to interest available in foreign countries. 165

5.6.3 Power, Fuel & Water Most of the quarry areas in India do not have infrastructure for power facilities. Almost every mine is dependent on DG set, whereas, infrastructure in the competing countries does not pose such problems. Fuel like Diesel, Petrol, LPG, Acetylene Gas, Electricity should be made available at a low price for stone mining industry. Quarries outside India have developed infrastructure. A similar model be adopted in India by extending infrastructure for power and water in stone belts. 5.6.4 Infrastructure The transportation of raw blocks and finished goods to and fro quarries and factories are severely hampered due to lack of proper roads and rail connectivity from major stone clusters.

Internationally, more than 90% internal movements of dimension stones to ports and other destinations are made by rail. However, in case of India, transportation is totally dependent on high cost road transport and there is no rail facility for transporting dimensional stone blocks at all. Granite, marble and sandstone being dead weight/heavy weight cargo, low cost transportation, preferably rail is much needed. Adequate railway transport including container facilities need to be provided at various centres producing decorative & dimensional stones.

5.7 Promotion of stone Handicrafts and Artefacts Alternative option for exporting granite and marble (decorative stones) in processed form to maximize export is to develop and promote artefacts and special decorative and ornamental items of high value addition. There is tremendous skill in the country, which can be explored and supported with special incentives. This can certainly bring about substantial foreign exchange addition.

Indian craftsmen are very talented and gifted. So far, this sector has contributed on their own initiative with little or no help from the Government. This sector utilises

166

the Stone waste and secondary stones to best advantage and in turn create more job opportunities in rural area. Some of the highly specialised products of this sector are: 

Ball fountain, Dancing & Rotating pillar fountain, Rotating cube fountain, Pillar over Pillar fountain, Ball over disc fountain, Dancing doll fountain etc.



Fruit bowl, Flower vases, Wash basin, Pillar, Pillar cladding, Table ware (Crockery), Balusters, Handrail, Fire place (Moldings), Centre table legs / Statue stands etc.



Innovative small products where maximum waste stones can be utilized

This stone segment holds great potential in India both for domestic consumption as well as exports. The traditional skill of the Indian artisans needs to be supported, motivated, preserved and developed. Suitable measures need to be taken for: 

Uniform sales tax exemption is provided to all stone craft items irrespective of their level of mechanisation.



Refresher courses for skill upgradation and use of new tools and machinery are provided to the artisans with reference to Pneumatic and power tools, Innovative design concepts, and use of templates.



Support be provided to artisans for group participation in International fairs



Workshops need to be organised to educate entrepreneurs about new technologies in stone craft; and their adaptability to Indian conditions.



Define Selection Criteria of Stones for typical artistic applications



Standardisation and codification of sizes and physical attributes for typical architectural applications.



Adoption of best practices for production



Compilation and publication in the form of exhaustive reference material.

5.8 Research & Development As far as Granite, Marble & decorative Stone are concerned; the present indigenous R & D sector is negligible. Entrepreneurs have been able to get the technical R & D help from their overseas counterparts and clients all these years. Best of the 167

technology has come to Granite and Stone industry through aggressive marketing by overseas manufacturers of machinery and processing industry of stones.

For granite, it is generally acknowledged that the industry has to meet the cost for commercial information and R & D. It was decided that there should be a permanent arrangement for addressing the R & D related issues of granite through National Institute of Rock Mechanics – a research institute of Ministry of Mines.

Government of Rajasthan with the support of Ministry of Commerce & Industry and Ministry of Mines, Govt of India, RIICO and UNIDO has established a centre of excellence at the national level for the development of dimensional stone sector especially marble, sandstone, kotastone, slate and granite. The state-of-art facilities including R&D setup for testing of all the types of stones is operational now at Jaipur. There is need to establish regional R&D centres through NIRM and CDOS in prominent stone areas. AIGSA too has plans to have R&D facilities at Bangalore.

The quarrying for marble and granite has been developed on scientific lines in India. However, so far sandstone quarrying is yet undertaken mostly manually thereby resulting into excessive wastage. Suitable efforts should be made by CDOS jointly with the state department of Mines & Geology and UNIDO to develop and promote mechanized quarrying for sandstone blocks.

5.8.1 Testing and Quality Certification on Stone Testing of stone is essential for identifying the right stones for the right application worldwide. The architects if aware of the properties of stones would be able to use stones in structural applications in large complexes. The structural analysis of stones would also assist stones in competing with alternative materials like ceramics etc.

Test Certification would be mandatory for any exports to Europe in a couple of years. Suitable measures thereof should be taken for:

168



Encouraging testing of stones through awareness campaigns about the oncoming restrictions in Europe and elsewhere



Defining Selection Criteria of Stones for typical architectural applications



Standardisation and codification of sizes and physical attributes for typical architectural applications



Preparation of reference manuals on Installation, usage, maintenance and restoration of Stones



Knowledge dissemination on stones in architectural and engineering colleges.



Inclusion of prescribed standards and methods in Government Codes and Standards



In order to establish brand equity and quality of Indian stones in the global market testing and export quality certification of Indian dimensional stones should be made mandatory for all exporters.

5.9 Uniformity in Policies of State Governments In order to provide a level playing field in all the states, there must be uniform policies for mineral leasing, taxation, royalty, incentives etc. at the state level.

5.10 “National Stone Technological Upgradation and Development Fund” Government of India through Ministry of Mines may consider setting up a National Stone Technological Upgradation and Development

Fund for

sustainable

development of Indian dimensional sector by imposing a cess of 2% of the royalty payable by

quarry owners for marble,

granite,

sandstone,

slate,

flaggy

limestone/dimensional limestone and quartzite and to transfer this amount to National Stone Technological Upgradation and Development Fund for assistance in following key areas: 

Technological upgradation and modernization of mining/quarrying and processing for granite, marble, sandstone, slate and limestone for increasing its global competitiveness, including indigenisation of globally accepted technologies

169



Environmental protection and management through promotion of ecofriendly technologies aimed at increasing productivity, reduction in waste including utilization of waste and support for rehabilitation of mined areas etc.



Capacity building for Human resource Development through training and skill upgradation programmes aimed at value addition, better quality management, productivity and safety.



Operationalizing and strengthening testing & standardization facilities, establishing export inspection agency & quality certification services, technical consultancy etc.



Providing technology and design interventions for stone artefacts and other value added products.



Market development and increasing export competitiveness of Indian Stone Industry in the global market.



Development support for stone clusters.



Support for technological upgradation and modernization of technologies for stone finishing, material handling, product packaging, stone installation & cladding etc.



Strengthening institutional development mechanism for stone sector Table – 5.3 INDIAN EXPORTS OF GRANITE DIMENSIONAL BLOCKS AND POLISHED GRANITE PRODUCTS (In Million Rupees)

SL. No.

YEAR

1 2000/01 2 2001/02 3 2002/03 4 2003/04 5 2004/05 6 2005/06 Source: AIGSA

GRANITE DIMENSIONAL BLOCKS 5862.00 6139.00 7382.00 7691.00 7687.00 5280.00

% SHARE

POLISHED % GRANITE SHARE

TOTAL

30 30 30 30 30 20

13678.00 14324.00 17223.00 17947.00 17935.00 21120.00

19540.00 20463.00 24605.00 26538.00 25622.00 26400.00

170

70 70 70 70 70 80

Table – 5.4 MAJOR STONE IMPORTING COUNTRIES FROM INDIA - PERCENTAGE SHARE COUNTRY ITALY TAIWAN HONG KONG JAPAN CHINA U.S.A. GERMANY BELGIUM FRANCE SPAIN OTHERS TOTAL

PERCENT (%) 26 18 10 7 7 5 4 3 2 1 17 100

Source: AIGSA Table – 5.5 STATEMENT SHOWING WORLD EXPORTS OF GRANITE FINISHED PRODUCTS (Quantity in thousand tonnes) COUNTRIES ITALY CHINA PORTUGAL SPAIN INDIA BELGIUM POLAND TURKEY CZECH. REPUBLIC GERMANY FRANCE GREECE USA MEXICO BRAZIL NETHERLANDS SOUTH AFRICA SOUTH KOREA CANADA Source: AIGSA

FINISHED PRODUCTS 2583 2232 840 411 366 324 245 240 188 126 133 153 84 109 104 122 21 31 153

171

Table – 5.6 STATEMENT SHOWING PROJECTED EXPORTS OF GRANITE BLOCKS & FINISHED PRODUCTS FOR NEXT 15 YEARS (At an anticipated growth rate of 20% per annum) Year 2005/06 2006/07 1 2007/08 2 2008/09 3 2009/10 4 2010/11 5 2011/12 1 2012/13 2 2013/14 3 2014/15 4 2015/16 5 2016/17 1 2017/18 2 2018/19 3 2019/20 4 2020/21 5 2021/22 Source: Ministry of Commerce and AIGSA

Rupees (in Crores) 3583 4300 5100 6192 7430 8916 9459 10500 11351 13621 16345 19615 23578 28245 33895 40674 48808

172

Table – 5.7 STATEMENT SHOWING PROJECTED DOMESTIC CONSUMPTION OF GRANITE PRODUCTS (At an anticipated growth rate of 20% per annum) Sl. No. 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Source: AIGSA

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Projected consumption (In Rupees Crores) 4000 4800 5760 6912 8294 9953 11944 14333 17199 20639 24767 29720 35664 42797 51356 61628

5.11 PROSPECTS OF GRANITE INDUSTRY IN ANDHRA PRADESH Now-a-days heavy and light industries, which play a significant role in the country‟s development, depend on the regular and systematic supply of mineral raw material. Mineral based industries play an important role in shaping the industrial growth of developing states like Andhra Pradesh. The industrial minerals have their own placed of importance in the area of mineral based industries in supplying intermediate products for metallurgical as well as allied and consumable products for the market. Industrialisation is a multidisciplinary activity and it depends on various resource managements apart from contemporary socio-economic influences. The prospects of a particular industry in the same resource base may vary from time to time and the 173

demand will catch up at a given point of time and continues to be for considerable period.

From the Ancient times the rocks and stones have been used for construction of dwelling places, structures, war memorials, Vijaya stambhas, stupas, monastries, Temples and other places of Worship. But as man civilised progressively he has sought special types of rocks with more and more decorative qualities for his construction activities. Now a days, several types of rocks are imported and exported by many countries across the land and seas, for different decorative and construction purposes.

India, endowed with vast deposits of different kinds of granite is one of the largest producers in the world. The development during last two decades in quarrying and processing of granite to mirror finish, have revolutionised the stone industry to meet the growing demands of indigenous and foreign buyers. The following are some of the important factors which influence the prospects of granite industry in the state. A. Abundance of Raw Material B. Availability of labour C. Infrastructure D. Market. E. Technology. F. Government Policy.

174

A. Abundance of Raw Material: The state of Andhra Pradesh is endowed with granites of export quality with various colours. Most important deposits occur in Chittoor, Hyderabad, Khammam and Warangal districts. Pink, porphyry and grey granite deposits are available in Karimnagar, Kurnool, Prakasam and Anantapur districts. Grey or flesh coloured granites are also available in Hyderabad, Khammam, Warangal and Ranga-Reddy districts. Black granite (dolerite) is available near Khammam in the form of radial dykes. Syenites near Elcheru in Guntur district and Kunavaram in Khammam district are also reported to be ornamental stones. Dolerite available in Kuppam and Palamner taluks in Chittoor district are well known since long for granite production and they are used as ornamental stone. There are about 400 leases for black and coloured granites in this State. Of these about 230 are for black granites and remaining for pink and multi coloured granites. The Granite Industry is one of the fastest growing and yet traditional industries with a large and growing base. It has shown considerable growth in the preceding decade. The export potential is high but the industry is reportedly facing problems due to lack of quarries. The supply of building stones, pavement blocks and occasional pillars were the main product areas of the industry till the late seventies, with some variations provided by the temple sculptures in hoping the stone pillars to mirror finish. Only in seventies, a new dimension was added to the industry when the export of cut and polished granite slabs commenced along with the traditional stone blocks. The entry of 100% export oriented polished stone manufacturers into the field added an entirely new dimension and exposed it to greater international competition and thereby excellent market prospects. The development of export market depends upon the establishment of more export oriented units but it is essential to provide the industry with suitable quality of stones at economical prices. The entrepreneurs are not venturing in the quarry leases on long-term basis on which most of the international business depends. Granite is considered a minor mineral under the non-metallic mineral category. The Mines and 175

Minerals (Regulation and Development) Rules 1957 include black granite among the category of minor minerals under Section 3(c) of the Act. The Act, however, empowered the State Government to oversee and regulate the granting of leases to the private sector. The Karnataka Government, which is at the foremost in granite industry, is of the opinion that the granite deposits are national wealth and should be exploited by Government owned agencies. Hence it has banned the private sector quarrying the black granite in 1979 and declared that the state owned Mysore Minerals Limited would take over the quarrying activity. Subsequently the ban was extended to coloured red granite exploitation also. However, there has been some relaxation in the field in the recent past. For development of quarry the Government may consider the industry for giving prospective license. This will not only help in the identification of stone deposits and their quality but will also help the industry to use its capacity to explore stone deposits to its fullest extent. The stone exports so far have been classified as those emanating from handicraft industry and are, therefore, entitled to only 10% cash compensatory support. The stone industry in India has progressed considerably in terms of technology; it has long ceased to be a handicraft industry. Due to conservative quarrying policies the industry is facing shortage of raw blocks and slowed down development due to the uncertainty of availability of raw granite. The leasing laws need be relaxed in favour of private sector on long-term basis so that high investment on machinery and equipment could be attracted by the private sector. The different varieties of granite produced in the state need standardisation to enable the industry to meet the domestic and foreign market. Therefore, suitable methodology be adopted for the standardisation of granite.

176

B. Availability of Labour: The granite industry is labour intensive and it requires skilled manpower for production of granite without much wastage. The labour is available at cheaper rate in the state but they are not aided by the technology. They are not provided with modern tools. Technology is not upgraded with changing times. Therefore, the entrepreneurs should introduce the modern technology to increase the productivity at quarrying and processing in order to enhance the prospects of the industry. C. Infrastructure: The infrastructure facilities like roads, communication, ports, and banking facilities, play an important role in deciding the prospects of Export Oriented Units of granite industry. The state of Andhra Pradesh has all basic infrastructure and organisation manpower to take up quarrying as well as processing. Therefore, there is tremendous scope for promotion of industries on large scale in the state. D. Market: The domestic market for natural stone, which is growing at a phenomenal rate, provides a clear advantage for industry. It has balancing effect on the exports and is supportive in nature for the industry. The preference world over is shifting towards natural stone. The growing energy costs are pushing up the cost of synthetic materials and natural stones are becoming more competitive. The market is growing steadily for the natural stones over the years. The recessionary trends visible at present are only temporary. The long term, prospects are good. However in view of the competition, the industry should be prepared to face the challenge in terms of quality and price and innovative marketing methods. They should aim at value addition, new product development and turnkey service aimed at much higher market share.

177

The preference is for use of local material in view of ready availability and cheaper transport costs. Effective timely supplies and popularising the new colours and their superiority could change the consumption pattern inducing better flow of the material. The industry should concentrate on product upgradation, standardisation of their stone varieties and take up big promotional programme. Architects and Builders throughout the world should enter the Indian Stones in all reference manuals used. The entrepreneurs should have more presence in International forums and expositions to influence the marketing decisions of various consumer groups. E. Technology: Technology is one of the important factors, which influence the prospects of the granite industry. The technology should be developed to process local stone and blocks depending on hardness, size and other parameters. So that the entrepreneurs of the granite industry can extract the blocks from quarries most efficiently, in a short span of time and process the blocks with the help of machinery in a most elegant manner and thereby, attract the local market as well as foreign market. F. Government Policy: The present trend of liberalisation, privatisation, should help the industry. Many state Governments should formulate their policies in considering grant of adequate areas on lease for sufficiently longer periods so as to instil confidence and courage in the entrepreneurs in taking the investment decisions. In order to encourage the new entrepreneurs, the central and the state Governments are offering a number of financial incentives and concessions for those who started the small-scale industries and processing units of granite. In order to stimulate industrialisation throughout the state, the Government is offering facilities and incentives to prospective entrepreneurs wishing to set up industries in Andhra Pradesh. The incentive scheme was first introduced in the state

178

in 1961 and has been modified several times to make it more attractive and keeping in view the needs to achieve the goal. Fourteen districts of the state are covered under central subsidy scheme where investment subsidy at 15% to 10% is given. Besides, fiscal concessions like income tax rebate, higher depreciation allowance, lower rate of interest, longer periods of moratorium and repayment etc, power rebate of 5% for the first three years is given. In seven other districts, not covered under the Central Subsidy Scheme, the state Government has identified 20 growth centres for the purpose of sanction of incentives. Investment subsidy, deferment of sales tax, power rebate is granted to industries coming up in the growth centre areas. The Adilabad, Anantapur and Srikakulam are declared as Industries Incentive Districts. Now Industries will be eligible for higher percentage of incentive in addition to subsidy on land up to 50 acres. 1. Concession of 10% in the cost of plot/land. 2. Preferential allotment of plot/land. 3. Elimination of interest and administrative overheads, while arriving at the cost of the shed allotted to ST and SC entrepreneurs in tribal areas. 4. The Andhra Pradesh Infrastructure Corporation Limited has taken up the construction of Minimised Industrial Estate (MIE) for the benefit of SC/ST at 12 places in the state. 5. Sheds constructed at MIE meant for SC/ST entrepreneurs are allotted at a nominal rent of Rs. 0.10 per sq. ft. for a period of five years, and given later on a hire purchase basis without any interest and the cost payable over a period of 20 years. Fiscal incentives and concessions given by other state Governments are also more or less similar to those offered by Karnataka and Andhra Pradesh. Some of the important measures adopted by the Central Government for encouraging the growth of granite industry are: 179

1. Allowing the export of granite stones through the export policy. 2. Exemption from custom duty on import of capital goods, equipment, tools, consumables and spruces. 3. Development of stone industry under the liberalised licensed procedure of the 100% Export Oriented Units Scheme. 4. Caste subsidies are provided for setting up medium scale industries in backward areas. 5. Providing export finance at concessional interest to achieve better export. Financial assistance for term loan is also provided. 6. Liberalised foreign collaboration and foreign loan borrowable. 7. Excise duties on indigenous equipment have been waived for the purchases made by the 100% Export Oriented Units. 8. Concession from payment of tax under Section 80HHC of Income Tax Act has been extended to granite exports. Andhra Pradesh Mineral Development Corporation has a crucial role in the development of granite processing industry in the State. Most of the services in the field of mineral development and mineral based industries would be available from the APMDC to the entrepreneurs and industrialists of granite cutting and polishing industries. These will naturally include identification of suitable decorative stones, estimation of their reserves, quality, mine planning, leasing, mining methods, equipment and overseeing mining aspects. The areas where the Corporation can play significant role are listed below: 1. Provision of basic infrastructure for the granite processing industry. 2. Marketing assistance to avoid competition in the face of growing number of units in the granite-processing field. 3. Manpower development: To evolve short-term courses for training and development of personnel involved at various levels in the industry, courses of this nature may be evolved with active participation of the entrepreneurs in Andhra Pradesh. 180

4. Raw material supply: Regular supply of quality raw material at reasonable prices. 5. Consultancy and guidance to entrepreneurs in all aspects in regard to making granite processing a profitable venture. 6. Study and information: In-depth and integrated studies of the granite processing industries to help in evolving and implementing the above tasks. Study, research exercises should involve active participation of entrepreneurs and their bodies. Information dissemination is necessary for promoting awareness in the industry and public to develop and explore new avenues in marketing.

Though the Government has brought the granite industry under the extreme focus area, many closely associated with it appear to believe that it has got bogged down in uncertainties. This is despite the fact the liberalised environment has bought a rationalised regime for most industry sectors. The grouse emanates from the inadequate initiative shown by the Centre wherever individual states have a say in matters. Yet, an optimistic evaluation seems to be that the industry is set for a facelift with the setting up of Granite Development Council. The aim of this broad based organisation, with industry representatives and Government officials as members, is to push exports of granite and granite products. Various interests have taken extreme views regarding the possibility of export growth. While one section says that exports might cross-even Rs. 2000 crore by the turn of the century, the pessimistic view has it that it might plummet to even 30 or 40 percent of the current levels. This is to say that the future of the industry will depend, to a great extent, on the policy decisions of the Central Government, and much less on market influences.

181

The Granite Development Council is in the process of framing a long-term approach and evolving a national policy. The royalty issue will be discussed threadbare and study the practice followed by various states so as to evolve a common approach. This is because royalty has not been uniform in the country and could lead to more problems as more and more granite deposits of commercial importance are being reported from various states. As a result, the recoverable reserves have increased to 4.35 million cubic metres. The actual reserves must be much more since the Geological Survey of India has calculated it at 200 billion cubic metres. Over the years the most contentious issue has been of the putta lands. To extract granite reserves from their own land, private owners were being forced to pay dead rents, besides royalty. Many small miners fall into this category, holding anything up to three acres and the widespread feeling is that these owners can ill-afford to do it. Eventually, when it comes to mining proper, the small owners usually found themselves strapped for cash and comprised by using inferior technology, which leads to high wastes and lower productivity. For long the industry had been pleading for speedy disposal of quarry licence applications. There have been instances of prospective miners having had to wait for over five years. Despite giving Granite Industry the status of a thrust area, not much is being done. Technology remains poor in most mining units leading to wastes. The value addition remains low. As such 51 percent of India‟s exports are of crude and roughly trimmed stone, rather than cut and polished variety, which commands higher price. Thus India loses its advantage of far cheaper production costs. This is where a country with poor reserves in granite commands a big share in the global market. Italy, a pioneer in stone culture owes its status to top class processing and polishing technology. Yet, there are no incentives or aid, to update technology in our country. The nascent industry, with its unique advantages should have made good progress in the five years since it cut its teeth, as it were. But it has been with problems that are largely of its own making, especially in the scientific exploitation of this valuable foreign exchange earner. If the insensible application of business decisions threatens 182

to drag its prospects, the cut throat competition-without emphasis on quality and market research-may be the undoing of the industry. Analysis warns that if certain key issues are neglected at this stage, global giants may pose a serious threat to the entrepreneurs. Big international companies have of late, been looking out for new processing facilities to get around the problem of high costs in their countries. Japan companies are shifting to Thailand, Korean and Singaporean firms to Malaysia. This phenomenon can seriously affect India‟s prospects, as the international companies would capture all the markets. The entry of international giants in the race will not make matters easy. Despite 78 percent growth in exports in just one year after granite became a hot product, Indian units have made little effort to cash in on its rich potential, what with the vast resources being exploited in an utterly unscientific manner with the sole aim of garnering easy of profits. The vastness of deposits, expected to last for more than 100 years and the cheapness of labour could be formidable factors for India to emerge as a serious competitor. It has had to reckon with stiff competition from the European granite giants, Italy and Spain, which depend largely on imports for their raw materials. India is sitting on seemingly limitless quantities of deposits making it the best raw material source. It also enjoys advantage over China, Brazil and South Africa in rough block exports and has created a sizeable demand in the monuments market. But lack of a holistic approach in developing the industry has put brakes on its sustained growth. India has yet to make inroads into the finished products area, which holds tremendous opportunities, value addition, too, would swell export earnings if only the industry makes use of the available technologies with business sense. Being a net foreign exchange earner, granite exports should be able to expand market share in terms of volume and price realisation because of the advantage of devaluation which would further increase the competitive price from India. With an average increase of ten percent in the market every year, a flexible market approach, 183

backed by proper research, should bring rich dividends. Instead of too many players chasing the same small market, each exporter should focus on a select product and nurture a niche market. Lack of professional approach to marketing and the situation of too many players jumping into the market without a proper understanding of the industry are serious barriers to India emerging as a leader in the international market. This is particularly true of Andhra Pradesh, which accounts for 50 percent of the country‟s granite exports. The acquisition and adaptation of technology is another critical area where the industry has shown little wisdom. This has caused severe efficiency losses while quarrying and processing resulting in considerably wastage of the end product. The use of the standard machinery available in the international market has led to adaptation and assimilation problems for the industry and added unnecessary capital costs. The high cost of machinery has only added to the cost of production, which is not commensurate with productivity. All this warrants a serious look by the industry, which should bring in more effective measures. The industry has been able to achieve a production efficiency of not more than 50-60 percent from the gang saws (the most commonly used machine), whereas, in Italy and Spain it is 80 percent. Even the quality of the labour needs greater attention, as against India per capita productivity of one cubic metre; in Italy and Spain it is about 30 cubic meters. A right mix of machines and an improvement in labour efficiency would go a long way in increasing the overall production. Another serious obstacle to India emerging as a major player is quality. Inadequate attention to the dressing of blocks before shipping has marked the country‟s reputation abroad. Interestingly not one granite company has gone in for ISO 9000 Certification, an effective marketing tool for a sustained presence in the international market. As for other production processes, which affect the efficient exploitation of the raw material, line balancing is an important area that has been given the short shift, adding to the already heavy burden on the capital cost of units. Greater 184

capacity than that required in parts of the three items of machinery gang saw, polishing equipment and edge-cutting gadgets has led to unnecessary capital costs, affecting productivity and, hence, pricing. With high interest costs and noncommensurate price realisation, many companies are finding it difficult to service their loans. The liquidity crunch has only aggravated their problem of working capital. If mortality has not set in, it is basically because of the huge demand. The granite industry received the prompt attention of the Government in the removal of certain discrepancies. It did away with the 10 percent export duty. Granite has been added to the list of „extreme focus‟ items for exports, which should be a great boost to the industry. Besides the formation of the development council for the granite industry should act as a catalyst to exploit the full potential of this foreign exchange earner. Another development was the establishment of norms by a national committee based on performance parameters of the industry. This should enable a better appraisal of the industry by funding agencies; it should also help the industry acquire a competitive edge and move confidently towards a pre-eminent position in the International market. Although the Government has given the industry priority status, some concessions, such as the relaxation of import duty on certain processing equipment, and incentives for the setting up of equipment manufacturing units within the country would go a long way in proving greater encouragement. The Union Government also decided to provide a major boost to the Rs. 1,500 crore granite exports from the country through various policy initiatives. The policy changes on the anvil for the granite sector include bringing down the threshold limit for providing benefits under the export promotion capital goods (EPCG) scheme for import of machinery for granite processing from the present level of Rs.20 crore to Rs.5 crore, provide incentive under Section 80 HHC of the Income Tax Act, allowing import of mining equipment for granite under the EPCG scheme and link export of rough granite to export of processed granite in a ration of 1:5.

185

The granite processing units at present have to import machinery worth Rs.20 crore for obtaining Export Promotional Capital Goods benefits. It has now been proposed to bring this down to Rs.5 crore, which will provide relief to several smaller granite processing units. Import of granite mining equipment will also be given Export Promotional Capital Goods benefits, which they do not enjoy at present. The proposal to link export of rough granite to export of processed granite in a ratio of 1:5 has been taken to promote value-added exports of granite. The Union Commerce Ministry estimates that the Indian granite industry has potential to increase granite exports if pragmatic policy measures are adopted both by the Centre and the State Governments. While renewing the license for granite mining, it was also proposed to ease the procedures for granting leases, royalty and dead rent between states to avoid any internal competition. The mining industry would take necessary initiatives to ensure that dead rent was changed on part with industrial mineral under the Mineral Concession Rules of the Central Government. The ministry was also planning to give leases for a period of 20 to 30 years, and automatic approval for the renewals. Besides, it was also considering reducing the royalty for the waste material generated during quarrying which was suitable for construction of roads and railway billets. The state Governments has to grant additional areas for quarry development at nominal rent. The ministry is also planning to exempt the levy of dead rent for two years in the interest of rapid development of the industry, access roads, dig-trail pits and demand generation would take considerable time. Granite is not a mineral; but is deemed as a mineral for the purpose of regulating the licenses. It is purely a decorative product besides a few engineering applications like surface plates and rollers etc. Granite is not a new thing for India. All the granite varieties that are exportable today were used and are still being used as ordinary rustic stones and as road jellys. But, quite suddenly granite is dramatised as if something very important and as a newly found product. 186

Granite industry and its growth purely depend upon a long-term strategy and organised planning. Since the rustic stone has to be converted into a global stone to compete in the international market, the stone industry needs to put lot of efforts and energy to satisfy the customers discriminating needs. The dimensional stone quarrying for export marketing needs substantial investment. For running a quarry, one has to plan an investment of minimum Rs.1 crore if he desires to do a scientific quarrying. But, to run a quarry on the international standard, one has to plan an investment of about Rs. 5 crores. One quarry needs such a big investment. The granite industry is labour intensive and highly power consuming. There is no other mining industry in the world which requires such heavy handling equipments where the product is so hard, rugged and a huge monolithic. These specialities are rarely understood and noticed by the public and even by a person entering into the stone industry. There is a tendency to commit errors in estimating granites, the products and the marketing, as anything beautiful exerts an inescapable attraction leading to a biased easy impression. The cost of production is not so much expensive when we compared to the expenditure on waste removal, which is quite heavy and unexpected. For several months one has to remove the waste and overburden without producing any exportable blocks. If there are lot of defects, the quarry operator will have to face serious financial difficulties. The rate of success in granite quarrying is a mere 20%. But, all these are part of the game. Except good black granites, we cannot guarantee an assured market for any other granite variety on a permanent basis. But all over the world there are more than 300 granite varieties so far introduced in the market. From India, there are now nearly 70 varieties of granite introduced in the market. From Andhra Pradesh, we have so far 11 known granite varieties of different colours. But, there are opportunities for developing another 10 to 15 varieties. Comparatively for the substantial investment made in quarrying machines and factory machines, the expected production from Andhra Pradesh has not reached its optimum level. The main reason can be attributed to the huge rejections and 187

substantial defects prevalent in almost all the materials from Andhra Pradesh. Secondly, the ceiling fixed on leasehold areas is also a deterrent from developing new granite varieties. To get over these ceiling difficulties, namesake small-scale industries have mushroomed whereas; the actual genuine factories established are quite small in number. The Government could avoid this situation in the granite industry by throwing open and allowing the entrepreneurs to plan freely like the major minerals. This will help substantial investment, employment generation, scientific quarrying and good exports. Why the various officials all over the country insist that all granite entrepreneurs should set up cutting and polishing factories and export only polished granites. This kind of condition is not insisted on all other minerals. But, the granite industry is severely dealt with in a cruel manner with unnecessary conditions and regulations. No other country is insisting these kinds of conditions for granite. Unfortunately, the ordinary granite still used for road metal is being battered and the entrepreneurs are all thrown over helter-skelter with all unrealistic policies. Granite is a fashion oriented aesthetic product. Preference on some granites and loosing markets for certain granite varieties are all routine features. Therefore, the granite policy should be totally flexible. Andhra Pradesh state Government which is always a pioneer in many fields should not lag behind in developing the granite industry in the state. The Government should facilitate easy self declaring permit systems for transporting the granites from the quarry to the factory or to the port, as the quarries are located in small villages and the Geology offices are located in towns and frequent travelling of long distance and taking permits delays the operations. As against this, even continuous sales tax payers make only declarations in proper form and remove and transport the goods. Same kind of trust can be followed regarding granite industries also. The granite industry will be a social stabiliser in offering a guaranteed job for the village people in the chronic drought prone regions. This could be a diplomatic and 188

cultural ambassador for our country‟s image as the stone clad building abroad will stand permanently as a monument with a tag of „Indian stone‟. The granite industry has received a fresh lease of life with the government announcing the Granite Conservation and Development Rules. The industry has witnessed a slowdown in the recent years because of the absence of a uniform mining policy and the fall in demand for Indian products from the major markets in South-East Asia. However, with the new policy and the markets showing sign of revival, the industry is likely to gain momentum in next few years. The Granite Development and Conservation Rules will help in systematic exploitation and conservation of reserves in the country. The rules have removed bottlenecks by way of formulating clear-cut guidelines on issuing prospecting licenses as well as granting renewing of mining leases. Many quarries which stopped working for want of leases is expected to start functioning. The new policy is definitely going to attract investments, especially in the mining sector. It may take at least two to three years before the investments start flowing in. The investments may be either direct or through joint ventures. In a significant move, the Union Government has come out with a uniform framework for the granite industry to facilitate systematic and scientific exploitation of the mineral throughout the country. Under this framework, mining lease will not be granted by a State Government unless it is satisfied with the evidence to show that the area for which the lease is applied for has been prospected earlier for granite. The period for which a prospecting license may be granted will not exceed two years. The period for which a lease will be granted and renewed will not exceed 30 years, provided that the minimum period for which any such lease may be granted will not be less than 20 years. A lease may be renewed for a period not exceeding 20 years. The minimum and maximum area for grant of a mining lease will not exceed one hectare and 50 hectares, respectively.

189

Every holder of a prospecting license for granite will have to submit within 60 days a scheme of prospecting to the State Government indicating the manner in which he proposes to carry out the prospecting operation. The new framework is a sequel to the notification issued by the Department of Mines in the Ministry of Steel and Mines. Under this policy, granite lease will not be granted or renewed by the State Government unless there is a mining plan approved by the State Government or any person authorised in this behalf by that Government for the development of the granite in the area concerned. No individual will commence the mining operations for granite in any area without the approval of the State authorised officials. Similarly, where mining operations for granite have been undertaken before the commencement of these rules, the holder of such lease will have to submit a mining plan within a period of one year from the date of commencement of these rules. After all these procedures, the prospecting and mining operations will have to be carried out in such a manner so as to ensure systematic development and conservation of granite deposits and protection of environment. The new policy in the mine leasing policy, where basically granite is treated as a „minor mineral‟ which comes under the State list, will upgrade the granite into a „major mineral‟. This will enable the material to be brought under the Concurrent List. One of the major problems currently faced by the granite industry was that the Government did not care to upgrade the technology used in mining. If permission was given to import state-of-the-art machinery for use in the early stages of mining, the percentage of recovery could be improved, wastage reduced and blocks produced in sizes of international standards. This would cut down costs by toning up productivity levels. The investment on the quarrying side of the industry was more than that required for the other stages of finishing.

190

India has its own potential strength despite certain short comings and policy frame works of certain states. Its market consolidation in certain products like building slabs, tiles, monuments and dimensional blocks are fully expected and appreciated all over the world. Today, the awareness for Indian Stone varieties has strongly grown. There is also awareness of Indian Quality and the capabilities of Indian factories. Logically, Indian exports have transformed more towards the processed high value products from dimensional blocks. But, India has not converted the national stone advantage into power like China. Still the inherent strength of India cannot be underestimated. But the Indian resource strength with the integration of modern technology, with right supportive policies of the Government, the conservation to high value productivity and strong marketing will determine the economic power in every product in the long run.

191