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CJI blames faulty pricing policy

Chief Justice of India SH Kapadia on Sunday blamed the faulty pricing policy for illegal mining in the country days after Karnataka lokayuta Santosh Hedge found Karnataka chief minister BS Yeddyurappa being a beneficiary of illegal mining.

delhi Updated: Jul 24, 2011 23:54 IST
HT Correspondent

Chief Justice of India SH Kapadia on Sunday blamed the faulty pricing policy for illegal mining in the country days after Karnataka lokayuta Santosh Hedge found Karnataka chief minister BS Yeddyurappa being a beneficiary of illegal mining.

Speaking at an international seminar on global environment and disaster management in presence of Prime Minister Manmohan Singh, Justice Kapadia said the huge difference in royalty paid to the government and international sale price of minerals was promoting illegal mining in many states.

Firms pay a royalty of 10% of the domestic sale price of iron ore at ad valerom basis which turns out to be less than R200 per tonne of mineral extracted whereas the global price of the same is close to Rs3,000 per tonne. Royalty for most minerals range from five to 10% of the domestic price, quite low considering escalating global prices.

Kapadia has sought a regulatory mechanism for pricing of minerals. "As of now minerals extracted are sold for huge prices abroad... there is a huge difference in profits of public sector companies and private sector companies," he said. Some of the pricing issues raised by the CJI had been dealth in the draft Mines and Minerals Regulation Bill, which got an empowered group of ministers approval this month.

The CJI, without naming Karnataka, said there was huge difference in royalty on iron ore and its international price resulting in an incentive for illegal mining in many states. "I am not against profit but it should not lead to greed," Kapadia said.

The PM accepted that it was no longer acceptable that certain degree of environmental degradation and over-exploitation of natural resources in the cause of promoting growth was inevitable. "It is no longer possible to treat the environment with passive disregard," he said.

Singh also warned the country's bid to protect environment through new legal framework, which the Centre is contemplating, should not bring back the “hated licence permit raj”. Singh announced the government will soon set up National Environment Appraisal and Monitoring Authority.