Maharashtra seeks Centre’s help on coal royalty revision

Sanjay Jog

Mumbai, July 17: The Maharashtra government has called upon the Centre to intervene for the revision of coal royalty by the state-run Coal India Ltd (CIL) as it has so far lost a revenue of nearly Rs 1,000 crore till now. The coal royalty has not been revised since October 1994.

Maharashtra minister for mining Satish Chaturvedi told The Financial Express that the Centre is empowered to enhance or reduce the rates of royalty on major minerals once in a period of three years.

Mr Chaturvedi, who participated in the all India conference of mining ministers convened by union minister for mines Sunderlal Patwa, said that the longer non-revision period of royalty has adversely affected the mineral revenues of the states. “Revenue from coal contributes about 84 per cent of the state’s total revenue of Rs 300 crore on account of royalty,” he added. Mr Chaturvedi said that the rate of royalty should be determined on the basis of mineral prices and not on its weight. “The present practice of fixation of royalty rates on the basis of weight comes to mere 2 per cent which should be replaced immediately and the valuation should be done based on mineral prices. The rate should not be less than 20 to 25 per cent,” he added.

Mr Chaturvedi said that he has demanded that Centre should allow state-run Maharashtra Mining Corporation (MMC) for the exploration of coal mines and directly sell the coal to the Maharashtra State Electricity Board (MSEB). “The Centre has already given such permission to the Orissa government for its undertaking. In our case, MMC will be in a position to sell the coal at a competitive rates to the MSEB for its thermal power stations. This will help MSEB to save fuel cost, especially against the backdrop of recent cotroversy over Dabhol project,” he opined. The minister said that he has called upon the Union Government to simplify and decentralise the procedure for obtaining mineral concessions under Forest Conservation Act, 1980. However, he added that the FCA provisions with regard to Zudpi forests has been a major roadblock in the development of mining, especially in the Vidarbha region.

“The union minister Mr Sunderlal Patwa has assured to hold a meeting comprising the Union ministries of environment and coal at the earliest to look into the issue,” he said. Mr Chaturvedi said that the state government has already made applicable, the facility of land bank for mining projects with reference to alternative requirement of land for afforestation and activity incidental to mining projects.

He said that state has already set up a mineral development fund for its utilisation towards mineral exploration and development of mining activities. An amount equal to 10 per cent of mineral revenue collected in the immediately preceding financial year is contributed towards the fund.