The Aravalli policy lesson: Aravalli’s real problem may not be miners but a real estate boom

Aravalli landscape in India

Image via Wikipedia

AVINASH CELESTINE IN THE ECONOMIC TIMES

October this year will mark the 10-year anniversary of the Supreme Court banning mining in the Aravalli region in Haryana. It is an anniversary that will be greeted with decidedly mixed feelings among local villagers, but with fondness on the part of the many real estate speculators who have seen the value of their landholdings skyrocket in recent years.

The Aravallis cut across a broad swathe of northern and western India – stretching from Gujarat and Rajasthan in the west to Haryana and Delhi in the east. Over the next few months, the Supreme Court will decide whether or not to lift the ban on mining in the ecologically sensitive region, home to a range of wildlife, and which also acts as a crucial source of groundwater for Delhi and its surrounding satellite towns.

Before 2002, the region was also a major source for grit and sand for the construction industry, not just in the national capital, but across the country. The region also supplied half the country’s requirement of silica, a critical input in materials such as glass and semiconductors.

ARAVALI MINING
ARAVALI MINING

The ban was imposed because of environmental concerns – it was subsequently tweaked over the years by the court to varying degrees. Mining in the Rajasthan Aravallis was allowed months after the ban was imposed, while the restrictions remained in place in Haryana, in the Faridabad and Gurgaon districts.

In 2009, the court reaffirmed this ban, and asked the Haryana government and miners to come up with a rehabilitation plan for the area. Over the next few weeks, the Central government’s Ministry of Environment and Forests will submit a report on those plans to the court, based on which the judges will take a call. If the rehabilitation plans pass muster, the ban on mining in the Aravalli region in Haryana could be lifted.

But what effect has the ban had over the past 10 years? As mining has declined in importance, there are encouraging signs that the environmental payoffs are working out. But ironically, even as mining comes to a halt, the Aravallis are facing a potentially bigger long-run challenge: real estate speculation.

WATER, WATER EVERYWHERE…

In a 2008 affidavit to the Supreme Court, the environment ministry pointed to results of a survey conducted in villages in Faridabad district. Between 1996 and 2003, ground water levels in one village declined by 17 metres, only to rise by about two metres in the years after that. In another cluster of villages in Faridabad district and neighbouring Delhi, groundwater levels rose by almost 7 metres after 2002-03.

In the years when mining was allowed, miners would dig deep down into the rock, breaking through the ground water table. The exposed water had to be pumped out for mining to continue, leading to a severe depletion of the water table, a problem which was reversed, at least partially after 2002.

“This rise in water levels may be attributed to closure of the mining activities in the area,” said the ministry officials in their affidavit. This occurred despite rainfall being below normal between 2003 and 2007. Since the ban, forest cover too has improved.

But if water tables have risen, it probably provides little joy to locals. Sher Singh, 26, a resident of Kot village, situated in the middle of the erstwhile mining belt in the part of the Aravalli range which runs through Faridabad district. “There is a lot of unemployment in the area now,” he says.

“When mining was still allowed, that was not the case – people did subcontracting work in the mines and there was a lot of employment for villagers. Now people go to Gurgaon and Faridabad to work but jobs are few and far between.”

Points out Aamir, 17, a resident of Dhauj village just up the road from Kot. “Since the closure of the mines in 2002, many of the youth in this area have taken to crime. There are a number of boys who are in jail right now on major criminal charges such as dacoity or rape.” Much of this has happened, he says, since 2002.

“When mining was still allowed, everyone in the village, of all ages, used to be involved, and each one used to earn at least some money,” says a local property dealer. Some of the larger subcontractors who provided labour to the mines earned as much as Rs 10,000-20,000 per day while even smaller contractors earned about Rs 500 per day, he says. “Now, after the mines closed, many of the boys in the village work as drivers in Gurgaon and Faridabad.”

And he sees this as a good thing. “They earn about Rs 8,000 a month and many are happy,” he laughs. “They get dressed, they get out, and are back home by 8 in the evening. It’s a good job for them. And with the money they bring in, there is at least some development in the village, which was not the case earlier.”

People are more educated than earlier as well, he says. “In the past, people would just go work in the mines and return home. Now the boys have more exposure to the outside world.”

ARAVALI MINING
ARAVALI MINING

SOLD OUT TOO EARLY

The property dealer is not doing too badly either – his house is one of the biggest in the village, and even as mining has declined, the area, given its proximity to Delhi, has become a focus for real estate speculation on a large scale. Several thousand acres of land have been gobbled up by developers and individuals. The dealer names prominent politicians and senior media persons who bought land in the area. If changes in land use pattern are eventually allowed, the current owners will make a killing.

But, most of the villagers sold out much earlier at far lower prices, missing out on the boom. “Villagers sold out in the 80s and 90s at a few thousand rupees an acre,” says Sadiq, another property dealer and resident of Alampur village. “Now most of the land is owned by outsiders and property can go for as high as Rs 40-45 lakh an acre.”

Last year, the Haryana government proposed a new district development plan for the area which would have allowed over 20 different kinds of real estate developments including farmhouses, industrial projects and hotels.
Subsequently that plan was amended, but it still allows for 500-hectare sized mega tourism projects, and education projects of around 40 hectares each.

“There are certainly plans being floated but there seems to be little clarity on what will finally come through,” says the real estate dealer. And all this talk is bringing the speculators in. “Real estate rates are now increasing by the day,” says Sadiq.

One miner, who had a number of mining leases in the region which were operative before the ban, argues that large real estate players have a vested interest in keeping mining out. “To some extent the two (real estate and mining), have opposing interests,” he says.

“With increase in land values, real estate is a bigger threat to the area than mining,” says Chetan Agarwal, an independent researcher who works on environmental issues. “With the SC orders, mining in the future will be banned or affect a small area at best. Also, following a ban, there is possibility of an improvement in the local environment. However, real estate activity has already started spreading, and will potentially cover a far bigger area. It is also hard to reverse,” he says.

BENEFICIARIES OF THE BAN

But there is another potential set of beneficiaries of the mining ban in Haryana. The net effect of the 2002 Supreme Court decisions was that while mining was allowed to continue in Rajasthan, a ban remained in Haryana.

In December 2011, the Central Empowered Committee of Supreme Court (CEC), a body which advises the court on matters related to forest conservation, conducted an investigation of the extent of illegal mining in Alwar in Rajasthan (which borders Haryana) and through which the Aravallis extend. The investigation also covered the district of Saharanpur in Uttar Pradesh and parts of Haryana.

In both Rajasthan and UP, the CEC found widespread instances of illegal mining – in Saharanpur alone, the CEC says, over 2.4 lakh cubic metres of boulder, sand and bajri was illegally mined and transported between July and September 2011. “Illegal mining on a massive scale,” said the CEC, “was going in UP, with the entire process being ‘legalised and facilitated by the concerned officers of the state.” And in Rajasthan, the problem was, if anything worse. “The area under illegal mining has increased substantially as in 2010 compared to 2005,” said the CEC.

But it was the reasons for the expansion in the scale of illegal mining, as given by the CEC, which are interesting. “The closure of legal mining in Haryana, and the consequent sky rocketing of the construction material prices has enabled/continues to enable persons involved in illegal mining to make windfall profits,” says the CEC.

Much of the sand and grit mined in Rajasthan (both legally and illegally) ultimately comes to be processed in the stone crushing zone in Faridabad district of Haryana itself. The stone crushers in this area used to process stone from mines located just a few kilometres away. “But now trucks come from a few hundred kilometres away,” says Narender Kumar, who owns one of the 162 stone crushers in the area. “And this has added to the transportation cost of materials. There is also a severe shortage of stone for the crushers here,” he says.

Som Sethi, of SS & Company, who had a number of mining leases in the region claims that prices of grit have risen from Rs 250 per tonne in 2002 to over Rs 400 per tonne in 2009, and are currently ruling at over Rs 750 per tonne. The upshot? The mining lobby in UP and Rajasthan, says the CEC, “…are making windfall profits because of continued closure of mining leases and consequent steep rise in the prices of construction material.”

So here’s the conundrum: mining ban in one area leads to more illegal mining in other areas. Then there’s the prospect of a massive real estate expansion. The policy dilemmas in the Aravalli will continue beyond the 10th anniversary of the original mining ban.

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