The Economic Survey of India 2016-17 discusses permanent funds in the context of the Goenchi Mati Movement. It also acknowledges the input of our member, Rahul Basu.
“13.46 One way to increase citizens’ participation is via creation of a dedicated Fund to which all mining revenue must accrue. The assumption here is that minerals are part of the commons, owned by the state as trustee for the people – including future generations. Therefore, the revenue from the natural resources should be saved in a non-wasting asset- in a Permanent Fund. The real income accrued by the Fund can be redistributed to citizens affected by and having a stake in the extraction of the resource. (Box 1)”
Box 1: Supreme Court of India Judgement on Goa Mining
The judgment of the Supreme Court of India in WP 435/2012 (Goa Foundation vs UoI & Ors, the Goa mining case), was the culmination of a series of landmark judgements on the subject of managing natural resources in public domain. In this case, the apex court ordered a cap on mining as well as the creation of a Goan Iron Ore Permanent Fund to meet the ends of inter-generational equity and sustainable development. When considered along with earlier SC judgments on the public trust doctrine, notably CA 4154/2000 (Fomento Resorts & Anr vs Minguel Martins & Ors), and on the disposal of natural resources, notably WP 423/2010 (CPIL & Ors vs UoI & Ors, the 2G spectrum case), a new picture emerges for minerals.
What implications does the SC judgment carry for natural resource management?
Natural resources, including minerals, are a shared inheritance that needs to be preserved for future generations. As sub-soil minerals are largely owned by the States, and offshore minerals by the Centre, the states are the trustees on behalf of the people. The cap on mining in Goa is to ensure the availability of minerals over several generations as well as to limit the environmental damage from permitted extraction.
The proposal for exploring the creation of a Goan Iron Ore Permanent Fund is notable for being the first that has potential to be established by judicial action. Norway and over 50 other countries / sub-nations have created Permanent Funds based on extracting economic rent from oil or other natural resources. The oldest of these funds, in Texas, dates back to 1876.”
“13.49 These measures have never been tried in India.But permanentfunds have been utilised effectively in many other countries, while pilot projects for UBI are beginning. Introducing these mechanisms in India could be contemplated, if only because their risks seem small compared with the costs that would accrue if the “natural resource curse” materialised on Indian soil, as it has in so many other countries around the world.
13.50 In sum, large bounties-either in the form of redistributed resources or natural resources- can create surprising pathologies, even in democratic India. Recognizing and responding to them creatively will be important to avoid making the errors of history.”