The union cabinet headed by Prime Minister Manmohan singh, accepted the New Mine and Mineral Development and Regulation bill, 2011 and decided to do away with 54 year old mining law on Friday.

The new law aimed at profit sharing mechanism, which helps government to under take more developmental programs in the project hit tribal areas and also several social welfare programs.

According to the new law the mining companies have to share their profit for Mineral Development Fund which will use for developmental programs in tribal areas in the country.

The coal companies have to share 26% of their net profit and Non-coal companies have to contribute the money equivalent to the Royalty they pay to the state government.

Union Minister of state for Mines Dinsha Patel said that special regulatory body is also being appointed to monitor the companies, which has special powers to investigate the illegal mining cases. The Land mark bill is pro-affected people to ensure progress in project hit areas, said Patel.

However industry seems unhappy with the cabinet decision and they criticized it saying that the proposed bill is discouraging and will hamper the progress and foreign investments. They have opposed the idea of profit sharing and also the uncertainty created over the identification of affected people.

However they welcomed the provision in bill to prevent illegal mining.