Performance of Public and Private Mining Firms in India (PDF)

The book examines three important research questions against the backdrop of increasing private sector participation in the Indian mining industry. The questions are: i) are private sector mining firms more productive than public sector mining firms? ii) do public sector mining firms comply with environmental regulations better than their private counterparts? and iii) do public sector mining firms perform better in social compliance than the private mining firms?Using firm level data from 1988-89 to 2005-06, the author finds that Total Factor Productivity (TFP) levels of private mining firms are significantly higher than those of public sector firms in three sectors - metallic, non-metallic and coal. In the petroleum sector, private sector firms outperformed the public sector firms in the initial years, while later on, the productivity of public sector firms exceeded that of private firms in a few years. The book examines the environmental performance of public and private mining firms in the context of Indian chromite mining industry using four indicators: namely, overburden management, air pollution, the quality of mine drainage water after treatment, and the quality of ground water. The author constructs a multidimensional environmental defiance index for comparing the aggregate environmental performance across ownership groups and does not find significant differences between the environmental performance of public and private mining firms. Both public and private mining firms have failed to comply with the environmental regulations.The author compares the social compliance of public- and private-sector mining firms by conducting a survey of households who have surrendered their land to the mining firms. It is found that the majority of households were dissatisfied with the compensation paid by both public and private sector mining firms. Furthermore, it is observed that there is no significant difference between the compensations provided by the public and private sector mining firms.