Central govt hikes royalty for gold, iron-ore mining

The mines ministry last week notified new rates for major minerals as demanded by several chief ministers, such as Naveen Patnaik of Odisha and Raman Singh of Chhattisgarh, in order to boost state revenues.

Updated on: Sep 10, 2014, 23:12:51 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The government has revised royalty rates for about 50-odd major minerals including gold, bauxite, iron ore and limestone to increase revenue of the state governments from natural resources but has decided to dump the new mineral development bill that provided for mandatory sharing of profits with locals.

The mines ministry last week notified new rates for major minerals as demanded by several chief ministers, such as Naveen Patnaik of Odisha and Raman Singh of Chhattisgarh, in order to boost state revenues.

A big change brought out in the new rules is that the royalty would be calculated on basis of average sale price instead of their earlier norm of sale price. “This has been done to bring in clarity in rules as some states had fixed royalty on lower sale price than the average resulting in loss to the government revenue,” a ministry official said.

The mines ministry fixes royalty for major minerals whereas the state governments decide on royalty rates for minor minerals. Royalty for coal is fixed by the coal ministry.

While the royalty for many minerals have been slightly increased the royalty for gold has been doubled from two to four percent and increased 50% for iron ore from 10% to 15%. Royalty for lead- and lime-based minerals have been increased by about 20% and that of manganese ore has also been hiked by about 10%.

The mechanism to calculate royalty on graphite has been changed from ad valorem basis to tonnage mined while two more categories for calculating royalty have been introduced.

However, while the rates have gone up, the ministry has quietly dumped the Mines and Mineral (Development and Regulation) Bill of 2011 that stipulated a mechanism for ensuring that locals benefited economically and socially from mining. The bill had said that a district mineral fund should be set up in which the royalty would be deposited and provided for 26% mandatory sharing of profits by companies with locals through a district development authority.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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