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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.

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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;

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(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

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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.

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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.

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5.2 Production and Exports

Table – 5.1

INDIAN STONE PRODUCTION

(in Thousand Tons)

1998 - 99 1999 - 00 2000 – 01 2001 –

02

2002 -03 2003 - 04 2004 - 05 2005 – 06

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

Limestone

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

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.

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Table – 5.2

INDIAN STONE EXPORTS

(Million Rupees)

1998 - 99 1999 – 00 2000 – 01 2001 - 02 2002 - 03 2003 – 04

Granite and

Products thereof

10130 16712 19540 20463 24606 26538

Marble and Products

thereof

1111 1580 2362 2085 2292 1993

Slate 867 1101 1436 934 1391 1460

Sandstones & other

stone products

thereof

911 1401 1530 2664 3502 4096

Total 13019 20794 24868 26146 31791 34087

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, destination-

wise 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.

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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.

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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

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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

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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

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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.

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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

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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

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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:

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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

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Environmental protection and management through promotion of eco-

friendly 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 GRANITE DIMENSIONAL BLOCKS

% SHARE

POLISHED GRANITE

% SHARE

TOTAL

1 2000/01 5862.00 30 13678.00 70 19540.00

2 2001/02 6139.00 30 14324.00 70 20463.00

3 2002/03 7382.00 30 17223.00 70 24605.00

4 2003/04 7691.00 30 17947.00 70 26538.00

5 2004/05 7687.00 30 17935.00 70 25622.00

6 2005/06 5280.00 20 21120.00 80 26400.00 Source: AIGSA

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Table – 5.4

MAJOR STONE IMPORTING COUNTRIES FROM INDIA - PERCENTAGE SHARE

COUNTRY PERCENT (%)

ITALY 26

TAIWAN 18

HONG KONG 10

JAPAN 7

CHINA 7

U.S.A. 5

GERMANY 4

BELGIUM 3

FRANCE 2

SPAIN 1

OTHERS 17

TOTAL 100

Source: AIGSA

Table – 5.5

STATEMENT SHOWING WORLD EXPORTS OF GRANITE FINISHED PRODUCTS (Quantity in thousand tonnes)

COUNTRIES FINISHED PRODUCTS

ITALY 2583

CHINA 2232

PORTUGAL 840

SPAIN 411

INDIA 366

BELGIUM 324

POLAND 245

TURKEY 240

CZECH. REPUBLIC 188

GERMANY 126

FRANCE 133

GREECE 153

USA 84

MEXICO 109

BRAZIL 104

NETHERLANDS 122

SOUTH AFRICA 21

SOUTH KOREA 31

CANADA 153 Source: AIGSA

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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 Rupees (in Crores)

2005/06 3583

2006/07 4300

1 2007/08 5100

2 2008/09 6192

3 2009/10 7430

4 2010/11 8916

5 2011/12 9459

1 2012/13 10500

2 2013/14 11351

3 2014/15 13621

4 2015/16 16345

5 2016/17 19615

1 2017/18 23578

2 2018/19 28245

3 2019/20 33895

4 2020/21 40674

5 2021/22 48808 Source: Ministry of Commerce and AIGSA

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Table – 5.7

STATEMENT SHOWING PROJECTED DOMESTIC CONSUMPTION OF GRANITE PRODUCTS

(At an anticipated growth rate of 20% per annum)

Sl. No. Year Projected consumption (In Rupees Crores)

2005 4000

1 2006 4800

2 2007 5760

3 2008 6912

4 2009 8294

5 2010 9953

1 2011 11944

2 2012 14333

3 2013 17199

4 2014 20639

5 2015 24767

1 2016 29720

2 2017 35664

3 2018 42797

4 2019 51356

5 2020 61628 Source: AIGSA

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

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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.

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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

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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.

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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.

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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

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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:

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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.

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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.

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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

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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,

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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

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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 non-

commensurate 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.

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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.

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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

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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

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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 frame-

work 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.

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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.

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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.