Mineral-rich tribal distts to get more govt fund
Mineral rich tribal districts of India would to get additional Rs 10,000 crore every year for development with a Group of Ministers deciding a new model of revenue sharing from minerals in the proposed mines and mineral (development and regulation) bill, 2011.delhi Updated: Jul 08, 2011 01:46 IST
Mineral rich tribal districts of India would to get additional Rs 10,000 crore every year for development with a Group of Ministers deciding a new model of revenue sharing from minerals in the proposed mines and mineral (development and regulation) bill, 2011.
A GoM headed by finance minister Pranab Mukerjee on Thursday decided that 26 % of profit from coal sector and amount equal to the royalty paid for non-coal minerals will have to be shared with district mineral foundation, mandated to carry out development works for locals affected by mining activity.
The GoM rejected the mines ministry proposal of sharing 26 % of the royalty with the district mineral foundation as it would have undermined the Government’s commitment to provide more resources for betterment of tribals.
26% profit revenue in coal sector.
Amount equal to royalty paid in non-coal minerals.
The money will be deposited with District Mineral Foundation.
The foundation will use the funds for development for locals displaced by mining.
“It is a progressive decision with an aim to provide additional resources to fasten development in forest and tribal rich mineral districts of India,” environment minister Jairam Ramesh, a GoM member, told HT.
India’s top 50 mineral rich districts also have majority tribal population and best quality forests.
The GoM decided for the twin formula to maximize money from the mineral sector for development. Profit sharing for coal was decided as public sector Coal India Limited extracts 90 % of the coal in India. In case of non-coal minerals, the GoM felt that evaluating profits from each mine of a private company will be difficult and some members also raised the issue of companies fudging their profit figures to evade sharing. “Royalty is pre-determined and fixed,” a GoM member said.
The decision will mean Coal India Limited, India biggest coal producing company, will have to pay Rs 2,500 crore every year to the foundation. Other public sector mining companies will have to pay anything between Rs 45 to 100 crore every year. In all, the GoM expects to get Rs 10,000 crore every year after the bill, to be introduced in monsoon session, gets Parliament approval.Under the existing regime, there was no revenue sharing for development of locals. But former mines minister B K Handique sought revamp of the old law to introduce revenue sharing for benefit of locals. The industry bodies and planning commission deputy chairperson Montek Singh Ahluwalia objected to profit sharing formula claiming that it will make the mining business economically unsustainable.
The GoM overruled the objections and agreed to a middle path. “It is for the first time revenue sharing has been introduced for industry,” a GoM member said. A similar provision of sharing revenue for welfare of locals in the proposed Companies Law was deleted.
First Published: Jul 07, 2011 22:49 IST