The rates of coal royalty were revised by the government on October 11, 1994 and as per the provision, the next revision would have been made effective from October 1, 1997. Sources said Orissa alone accounted for 48.38 billion tonnes of coal with royalty from coal accounting for approximately 75 per cent of the total mining revenue of the state. According to official sources, the existing rate of royalty for grades ``a'' and ``b'' coal per tonne had been fixed at Rs 135, while that of grade ``c'' at Rs 95. The rates for grades ``d'' and ``e'' and ``f''and ``g'' had been fixed at Rs 70 and Rs 50 respectively.

The state government, however, had proposed to the centre to enhance the royalty for grades a and b coal to Rs 175 and for grade c coal to Rs 140 while that of grades d and e to Rs 112 and grades f and g to Rs 93. Sources said although the state government had in the past written many letters to the centre requesting revision, the centre had turned it down citing several reasons.

Mostly the coal deposits in Orissa were found having f and g grade quality, but even if the centre accepted the state government's proposal, Orissa would receive an additional Rs 168.43 crore per year, sources said.