Admitting that illegal mining is "rampant", the Mines Ministry has blamed corruption as one of the main reasons for the menace, which not only causes revenue loss to the exchequer but also promotes lawlessness.

"Though Section 23C of MMDR Act, 1957, empowers the state governments to frame rules to prevent illegal mining... make such rules for preventing illegal mining, transportation and storage of mineral, illegal mining is still rampant," the Mines Ministry pointed out as areas of concern emerging during the 11th Plan.

"The major causes of illegal mining are poor detection and enforcement procedures...poor investigation & prosecution mechanism, corruption, connivance and interference," it added.

Inefficient concession grant process, including delays and inefficiencies in concession system, forest and other clearances also contribute to illegal mining, it said.

The ministry has also found the root of illegal mining to lack of awareness among those adversely affected, including environmental consequence of unregulated mining, loss of state revenue and promotion of lawlessness.

The ministry also raised concerns on "insufficient" integration and coordination of sectoral policy which results in suboptimal utilisation of the mines.

"Policies on beneficiation, value addition and end use to ensure more efficient metal making and better management of demand and supply at ore stage for the purpose are lacking," it said.

"There is no mechanism to plan the creation and management of mining related infrastructure, including roads, rail and ports. Investments are not taking place and infrastructure costs are making operations less competitive," the ministry said.

The development of mining as a standalone industry and incentivising and facilitating modernisation of the industry, including mining equipment and provisioning of the requisite numbers of well-trained mining engineers, geologists and geo-informatists has not taken place, it said.