New Delhi, March 4 (IANS): The Mines and Minerals (Development and Regulation) Amendment Bill, 2015, seeking to introduce the system of auction of mines to enhance transparency in mineral allocations was passed in Lok Sabha on Tuesday.

The bill, which will replace an ordinance promulgated in January, was passed amidst vociferous protests by opposition members from the Trinamool Congress, the Biju Janata Dal (BJD) and the RSP.

Introduced last week in the Lok Sabha, it seeks to introduce a system of auction in granting prospecting licences.

Steel and Mines Minister Narendra Singh Tomar, replying to the debate in parliament, said the bill will increase transparency, end discretion, augment production and benefit the local population.

Pointing out that iron ore production had declined to 152 million tonnes in 2013-14 from 218 million tonnes in 2009-10, Tomar said: "The sector contributes over two percent of the GDP but it was in deep crisis. It is one of the biggest employers and its revival will give jobs to our youth."

The bill envisages spending of a fixed percentage of revenue generated from mining on the development of the local area.

Opposition parties, notably the Biju Janata Dal, have been opposing it saying it infringes on the rights of the states -- a stand supported by the Congress and the Trinamool Congress. The opposition prevented its introduction in the Rajya Sabha.

"We have ceded many powers to states. We have also kept some as we cannot wash our hands of our responsibilities. We have taken into account the suggestions of states and other bodies and this bill is a revolutionary step," the minister said.

"Unlike in coal, states will be responsible for auctions under the MMDR Act and all revenues will go to them," Tomar told reporters after the bill's passage through the lower house.

As per its provisions, there will be no renewal of any mining concession, unlike the original act of 1957. Also, the licence will be for 50 years, as against 30 now, after which there will be no renewal but compulsory auction.

The government has already identified 199 mines for auction.

Speaking in New York on Monday, Finance Minister Arun Jaitley said the MMDR Amendment Bill seeks to change over from the earlier system which worked on an "obsolete first-come-first-served" principle.

"So whoever moves the application first, gets the mineral," he said describing the changes sought to be brought in.