Andhra lures Karnataka?s granite players with sops

Karnataka, which accounts for more than 50% of granite resources in the country, is slowly loosing its charm, as the neighbouring Andhra Pradesh has started wooing granite quarry developers and granite processing small scale industrial units by offering heavy sops. The trend was clearly visible during the slowdown. As a result, Andhra has been able to pip Karnataka in granite exports in recent years, said RR Hegde, general secretary of All India Granite & Stone Association (AIGSA).

Delay in granting quarrying licence, higher royalty and stringent rules have forced the industry to slowly shift its base to Andhra Pradesh from Karnataka, he said.

Ten years ago, Karnataka accounted for around 60% of foreign exchange earning through granite exports. But at present, Karnataka?s share has declined below 20% while that of Andhra has risen to 40-50%, said R Shiva Kumar, executive member of AIGSA.

On an average, Andhra Pradesh has been collecting Rs 1,500 from the quarry developers as royalty for per cubic metre of granite dispatched from quarry. The Karnataka government has come out with a rule that SSI units can buy up to 16 cubic meters of granite in any colour for processing by paying Rs 14,000 per month.

But, the Andhra government has been collecting royalty under three classes, categorising granite blocks into large, medium and small that benefited SSI units, which buy small blocks. Further, it offered 40% concession in royalty for SSI units during the recession, said Hegde.

But, in Karnataka the average fee of royalty stood at Rs 2,200 per cubic metre and there is no separate fee structure for small scale units. As a result, granite quarry owners used to pass the royalty fee on SSI units when they buy blocks from them.

The total granite reserve in Karnataka is estimated at around 220 million cubic metre. But the government has not taken any steps to tap this potential, Hegde added. ?In AP, the grant of lease is decided by a deputy director of mines and geology and applications are disposed within 120 days. But in Karnataka, no new licence was sanctioned for the past 6-7 years,? he said.

In fact, the Union government in 1999 introduced the granite conservation rules (GCR) under the mines and minerals (regulation and development) Act. It is mandatory for all the states to adopt these rules. But it has not been adopted by Karnataka while the Andhra Pradesh government implemented it and has been granting 20-year leases to granite developers, he added.

Of the total Rs 6,226 crore earned as foreign exchange by exporting granite and natural stones in 2008-09, the value of granite exports alone stood at around 60% said R Veeramani, chairman of Chennai-based Gem Granites, and the founder president of AIGSA. The organisation, fixed an export target of Rs 7,000 crore back in 2000. But till date, that has not been achieved.

?Unless and until all states in the country implement uniform policy on granite quarrying, it will not be possible to revive the industry?, he said.

The All India Granite & Stone Association is set to conduct ?Stona 2010?, the ninth international granite and stone fair, in Bangalore. The four-day event will commence on February 4.

AIGSA would hold a separate seminar in the event to discuss the road blocks in Indian granite industry and pass a resolution demanding that the state governments implement the Granite Conservation rules without further delay.