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Jun 10, 2012, 03.54 PM IST
The government is likely to come up with new royalty rates for major minerals including iron ore by month-end which will boost its revenues significantly.
"An inter-ministerial panel, formed to review royalty rates has submitted its draft recommendations. Consultations with states are on and the government is hopeful of finalising it by June and implementing the same by August," a top Mines Ministry official told PTI.
Once, the new rates are implemented, the same would not only increase the revenues significantly but also address the concerns of the states, seeking larger share of royalty, the official said.
The royalty rates for major minerals, including iron ore, are due for a revision this year and the 17-member inter-ministerial study group has submitted its draft report.
There are 51 minerals prescribed in the second schedule of the MMDR Act, 1957, and the rates vary from mineral to mineral. The royalty on iron ore is 10% at present.
The last revision was done in 2009, after which the revenue collection increased from Rs 2,319.21 crore in 2008-09 to Rs 4,469.75 crore in 2009-10.
The revenue from royalty was recorded at Rs 7,279.49 crore in 2010-11 whereas during April-December 2011 it generated Rs 5,829 crore, the official added.
Dissatisfied with the present royalty rates, states like Odisha and Chhattisgarh have already demanded a multi-fold increase in the levy.
Odisha Chief Minister Naveen Patnaik had said in a letter to Prime Minister Manmohan Singh last year that the mining industry is earning "super normal profits" at the cost of the state.
He had also demanded a 50% mineral resource windfall tax, taking a cue from Australia, which has decided to levy higher taxes on iron ore from July, 2012.
Mines Minister Dinsha Patel in a letter to Patnaik had said, "This issue would be taken up by the Study Group on Royalty and Dead Rent... where the state government of Odisha is also a member."
Earlier, Patel had also said that the issue of higher royalty will automatically get addressed when the new Mines and Minerals (Development and Regulation) (MMDR) Bill, 2011, will be passed.
The Bill, introduced Lok Sabha, is being examined by a parliamentary panel and makes it mandatory for coal miners to share 26% of their profit and an amount equivalent to royalty by other miners with project-affected people.
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