Coal royalty revision inadequate: UCCI

Utkal Chamber of Commerce and Industry, an apex body of industries in the state, has criticised the revision of coal royalty by the Centre, terming it as ‘inadequate’.

“The decision of royalty hike by the Centre is welcome as it will generate additional revenue for the state, but it is not adequate as Odisha bears the brunt of pollution arising out of coal mines,” said Ramesh Mohapatra , President, Utkal Chamber of Commerce and Industry (UCCI).

Industry sources say, new thermal plants are lined up for implementation by Independent Power Producers (IPPs) that will push the aggregate power generation in the state to about 45,000 MW in the next 8-9 years. These plants are expected to generate 100 million tonnes of fly ash per annum (mtpa).Presently, Orissa is generating about 7,000 MW of power and is producing about 15 mtpa of fly ash. Mohapatra rued that the hike in the coal royalty will lead to increase in the power purchase cost of the consumers (both domestic and commercial).

Coal India Limited (CIL) which has a cash reserve of almost Rs 50,000 crore should operate at a lower profit margin and reduce the prices of the dry fuel to bring down the cost of energy, he added.

The CCEA recently increased the royalty payout to states for coal and lignite, two raw materials crucial for power production. Royalty rates for the two non-ferrous minerals had not been revised since August 2007.

The rates have been increased to 14 per cent and six per cent ad valorem for coal and lignite respectively in a shift from the earlier graded and complicated system. Coal bearing states are expected to get an additional Rs 1,050 crore following the hike. Presently, states with coal reserves earn Rs 5,950 crore by way of royalty and this is expected to go up to Rs 7,000 crore. Earlier, state finance minister Prafulla Chandra Ghadai had expressed discontent over the coal royalty hike and termed the hike as unsatisfactory.